BTC Funding Rates Flip Bullish: Can Bitcoin Push Toward $85K?
As Bitcoin maintains support above $80,000, funding rates have shifted into positive territory. Could renewed spot ETF activity be the catalyst that propels BTC to $85,000?
Key takeaways:
- While derivative indicators reveal limited confidence among professional traders, incoming ETF capital flows and Strategy's continued accumulation may fuel the next upward move.
- Diminishing prospects for a diplomatic resolution between the US and Iran, combined with elevated oil prices, may hinder Bitcoin's ability to reach new price levels.
On Monday, Bitcoin (BTC) briefly touched the $82,000 mark, triggering a temporary spike in bullish leveraged positions. The leading cryptocurrency has maintained price levels around $80,000 for more than seven consecutive days, encouraging numerous market participants to position for additional gains. That said, derivatives data suggests professional traders maintain a cautious stance, raising questions about whether the $85,000 threshold is realistically achievable in the near term.
On Monday, the annualized funding rate for Bitcoin perpetual contracts momentarily climbed to 6%, entering neutral-to-bullish territory for the first time in more than 30 days. Despite this development, the metric has predominantly remained in negative territory, indicating stronger demand for short positions. While this absence of bullish conviction doesn't necessarily prevent price appreciation, it does underscore the prevailing caution among market participants.
Capital withdrawals from US-listed spot Bitcoin ETFs during Thursday and Friday sessions most likely contributed to this bearish positioning. Given that ETF flow data serves as a primary indicator of institutional sentiment, witnessing a negative shift precisely when Bitcoin repeatedly failed to sustain levels above $82,000 has generated legitimate concerns throughout the trading community.
Bitcoin miners pivot to AI, BTC price remains stable
Investor focus continues shifting toward the artificial intelligence industry, particularly following several Bitcoin mining companies' strategic moves into high-performance computing operations. On Friday, Iren (IREN US) revealed a substantial $34 billion partnership agreement with Nvidia. In parallel developments, Core Scientific (CORZ US) disclosed its intention to expand operations at its Muskogee, Oklahoma facility.
On April 26, Bitcoin's hashrate declined to its weakest level in eight weeks, yet the metric demonstrated considerable strength during May.
The estimated computational capacity securing the Bitcoin blockchain increased 5% over a two-week period, climbing to 970 exahashes per second. Although this remains notably below the peak level of 1,150 exahashes per second, concerns that mining operations would completely shift to AI infrastructure have proven unfounded.
Nevertheless, traders haven't yet embraced a decidedly bullish stance, with Bitcoin continuing to trade 35% beneath its all-time high.
On Monday, the Bitcoin options delta skew (put-call) registered at 10%, showing no change from the prior week's reading. The premium pricing on put (sell) options suggests that institutional players and market makers remain unwilling to hold downside exposure under current conditions. Regardless of whether economic factors or geopolitical tensions represent the primary concern, sophisticated traders are evidently anticipating potential downside movement.
Beyond cryptocurrency markets, Brent crude oil surged past $105 per barrel on Monday as the Strait of Hormuz continues operating at reduced capacity amid the Iranian conflict. US President Donald Trump characterized Iran's most recent demands as "totally unacceptable," while Israeli Prime Minister Benjamin Netanyahu maintained that hostilities cannot conclude until Iran's enriched uranium stockpiles are "taken out."
Regarding corporate Bitcoin treasury activity, Strategy (MSTR US) revealed it purchased $43 million worth of Bitcoin following a one-week pause. The acquisition was financed through equity sales. Therefore, despite continued bearish sentiment in derivatives markets, the pathway to $85,000 remains accessible. Any renewed capital inflows into Bitcoin spot ETFs during the current week could readily serve as the trigger the market requires.