Bitcoin's record negative funding streak signals high-conviction entry zone — K33

Bitcoin's (BTC) persistent negative funding rates could be a good entry zone for buyers, according to a K33 report on Tuesday.

The firm highlighted that Bitcoin's 30-day average funding rates have remained negative for 67 consecutive days, marking its longest streak in the 2020s. The continued negative trend amid price recovery points to a market that remains defensive.

Bitcoin's negative funding rates hint at upside amid crowded bearish positioning

K33 noted that sustained periods of negative funding rates have historically aligned with market bottoms, as crowded bearish positioning tends to unwind to the upside. 

"All past periods of sticky negative funding rates highlight one clear trend: BTC tends to move higher once sentiment clusters around defensive bets," the report stated.

Data across previous cycles shows that buying Bitcoin during these regimes yields stronger, more consistent returns than random entry points. 

"All past regimes mirroring the current have proven to be very attractive areas to allocate with conviction," K33 added.

The signal comes as Bitcoin continues to build momentum, trading at its highest levels since January, following a week of steady gains. However, spot trading volumes are hovering near yearly lows, suggesting limited involvement from both new buyers and sellers.

On the other hand, leverage in derivatives markets is rising, with open interest trending higher as funding rates stay negative. The divergence points to a potential short squeeze, where overly bearish positioning could increase upside moves if sentiment shifts.

"Investors buying in these periods experience less downside volatility and less time spent

underwater, which strengthens the case for using funding rates as a practical allocation decision tool for BTC positioning," the report noted.

Meanwhile, K33 added that activity on the Chicago Mercantile Exchange (CME) remains subdued despite Bitcoin's recent recovery. While open interest has risen since the April contract expiry and the futures basis has gradually widened, overall positioning remains well below recent highs.

The report noted a modest uptick in activity across futures-based exchange-traded funds (ETFs) and among active traders.

However, participation continues to trail levels seen between 2024 and 2025, indicating that institutional investors are returning cautiously rather than deploying capital at full scale.

Bitcoin is trading at $81,564 at the time of writing, up 2% on the day.