Bitcoin faced resistance at $77,800 on Wednesday, slipping back to $76,000 shortly after. The dip closely followed a correction in the S&P 500 index, now hovering near 7,200 points, and coincided with oil prices spiking to $118 per barrel as the conflict in Iran entered its 60th day. Demand for leveraged short Bitcoin futures rose in the aftermath, while professional investors on major exchanges kept their long-short position ratios stable.
Funding rates dip below zero
Bitcoin’s struggle to stay above $78,000 mirrored the S&P 500’s efforts to hold the 7,200 mark. Market caution increased due to worries that sustained high energy prices could trigger further inflation, limiting both consumer spending and corporate profits. Skepticism also surrounded the profitability of ongoing artificial intelligence investments by major tech firms.
Within this context, Bitcoin’s perpetual futures funding rate turned negative on Wednesday. The day before, the rate had shifted briefly from neutral to mildly positive, spending only a short time in positive territory. Typically ranging from 6% to 12%, a positive funding rate means buyers pay to maintain their long positions. When the rate turns negative, it signals dominance by sellers in the market.
According to analysts, Bitcoin’s perpetual futures funding rate has remained largely negative over the last two weeks, revealing increased appetite for leveraged short positions among traders. These statistics, however, do not necessarily mean that buyers have lost hope altogether, with professional traders’ long-short ratios offering a fuller picture of market sentiment.
Institutional traders weigh in
On major exchanges, the long-short position ratio among professional traders is closely watched. On Binance, this ratio rose to 0.80 on Wednesday, up slightly from Tuesday’s 0.75, suggesting only a modest increase in optimism. Despite this uptick, the ratio’s position below 1 continues to reflect a mildly bearish stance. Similarly, on OKX, there were occasional signs of optimism in recent days, but these were temporary and did not shift the broader outlook.
In summary, institutional investors have not drastically shifted their positions over the past week. The overall balance in their portfolios suggests that pessimism has not deepened significantly among so-called “whales,” pointing to a continued sense of caution more than dramatic negativity.
Macroeconomic factors and accumulation
Following the U.S. Federal Open Market Committee’s (FOMC) meeting on Wednesday, officials noted persistently high inflation, attributing much of it to the recent global surge in energy prices. Interest rates were held steady at levels targeted through the end of 2025. Notably, four FOMC members advocated for rate cuts, reflecting an unusually sharp divergence of views not seen in the last three decades.
Despite pessimistic signals, institutional buying activity has prevented a major shift in sentiment. Strategy, a leading BTC market participant, ramped up its holdings by 56,235 BTC over the past four weeks, taking its total to 818,334 BTC. This surpasses the amount held in the IBIT spot Bitcoin ETF portfolio, underscoring the scale of institutional accumulation.
Even after Bitcoin slipped back to $75,000 on Wednesday, large investors did not make significant adjustments. The balanced long-short ratios on leading exchanges show that professionals are maintaining a neutral stance, while prevailing negative funding rates in futures markets underscore ongoing market caution.
