The Bitcoin derivatives market has become increasingly dominated by bearish traders as it has continued to move in favor of them, with short traders gaining more profits against long traders.
Amid prolonged crypto market volatility, selling pressure has climbed to its highest level in three months as funding rates increasingly dive deep into negative territory.
Bitcoin funding rate remains extremely negative
According to data provided by the Onchain analytics platform, Bitcoin is seen hovering between $62,000 and $68,000, pushing its funding rates to remain firmly negative, reflecting persistent downside sentiment.
This suggests that bears have dominated the Bitcoin futures market since July 2025, with aggressive sell orders outweighing buy activities across the market.
With Bitcoin’s current price, the asset has declined massively from the previous local bottom it achieved near the $80,000 level, where funding rates were largely positive, indicating stronger long positioning at the time.
Nonetheless, the massive switch in market sentiment has significantly changed the market structure, with bearish conviction increasingly overpowering bullish attempts despite the brief recovery signs.
Further charts showcased by the platform reveals that the futures market has operated under elevated leverage for about 16 months. Nonetheless, since Bitcoin’s last all-time high, excessive leverage has been steadily unwinding.
As such, the recent wave of price declines has forced liquidations and capitulation among overleveraged traders, contributing to what analysts describe as a “leverage reset.”
Bitcoin OI recovers 1.48%
Amid the broad awakening of bearish traders, Bitcoin OI has continued to decline over the past few months.
However, the crypto market is seeing broad resurgence, which has extended to the derivatives market, with Bitcoin open interest showing a mild increase of 1.48% over the last 24 hours.
Bitcoin traders on CME showed some of the greatest interest as the asset’s open interest on the exchange surged by 6.61% over the period.