$BTC

Bitcoin Funding Prices Turn Negative as Nasdaq Futures Drop Nearly 700 Points

The renewed decline in funding rates comes amid risk aversion on Wall Street's Nasdaq, which is heavily weighted by technology stocks.

Bitcoin (BTC) market sentiment has turned bearish, with tech-heavy Nasdaq futures on Wall Street down nearly 700 points. The risk aversion is driven by concerns that low-cost Chinese artificial intelligence startup DeepSeek could significantly challenge U.S. tech dominance.

According to data source Velo Data, Bitcoin perpetual futures funding rates, which are the periodic payments made between long and short positions in perpetual futures contracts, have flipped to negative. It’s a sign of more bearish sentiment in the market — as traders chase short positions in anticipation of a price drop.

The leading cryptocurrency by market cap has fallen more than 3% since early morning in Asia, hitting a low of just under $98,000 at one point, according to CoinDesk data. Nasdaq-linked futures are down more than 3.5%, with NVIDIA, the artificial intelligence benchmark, down 10% in premarket trading.

“Today’s sell-off comes after President Donald Trump last week green-lighted a working group on crypto policy that notably stopped short of confirming that the U.S. would create a reserve for Bitcoin. Meanwhile, Chinese AI startup DeepSeek appears to have rattled tech stocks as its success suggests it is possible to build AI models at a lower cost than U.S.-based AI companies,” Peter Koziakov, co-founder and CEO of Mercuryo, said in an email.

Historically, however, negative volatility in funding rates has tended to mark local price bottoms. Furthermore, there is always the risk of a short squeeze – where bears give in and close their bets, putting upward pressure on prices. However, funding rates have narrowly reversed to bearish, meaning it is too early to describe BTC as a crowded trade.