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CoinDesk1 min read
Bitcoin Enters Disbelief Phase As Traders Keep Shorting The Rally
TL;DR
Bitcoin's recent price increase is met with skepticism as traders continue to short the market. Analysts indicate this 'disbelief phase' could lead to instability or potential upward momentum if bearish positions are forced to close.
Key points
- Bitcoin's price is rising despite traders shorting the market
- Analysts describe this as a 'disbelief phase'
- Negative funding rates on Binance indicate trader skepticism
- Market divergence suggests potential instability or upward momentum
Bitcoin’s advance over the past four weeks is colliding with a derivatives market that still looks positioned for weakness. Analysts tracking Binance funding and futures basis say traders continue to lean short even as BTC moves higher, creating what CryptoQuant contributor Darkfost described via X as a “phase of disbelief” rather than a clean bullish reset.
That divergence matters because it suggests the rally is unfolding against persistent skepticism, not broad conviction. In crypto, that kind of setup can cut both ways: it can signal fragile market structure, but it can also provide fuel if bearish positioning is forced to unwind.
Darkfost pointed to the 30-day cumulative evolution of Binance funding rates as the clearest sign that the market remains out of sync with price. “We’ve been hearing a lot about funding rates lately, as they remain negative even while Bitcoin continues to move higher,” he wrote.
“This chart offers a different perspective from what is usually observed. It shows the 30 day cumulative evolution of funding rates on Binance, making it easier to clearly identify when funding entered a sustained negative trend.”
Bitcoin funding rate 30-day sum | Source: X @Darkfost_Coc
His comparison was to late 2022, when Bitcoin was beginning to emerge from the bear market. At that point, Binance funding rates kept falling and reached as low as -7% on a 30-day cumulative basis. Today, the same indicator sits around -4.5%, which, in his view, shows how aggressively traders have continued betting against the move in recent months.
Darkfost’s argument is not simply that funding is negative, but that the persistence of that negativity reflects a market still trying to fade price strength. “Each time such a strong consensus has formed, it has instead helped create a bottom and fueled the rally that was beginning to develop,” he said. “As I mentioned several days ago, the market has entered a phase of disbelief, where traders still prefer fighting the trend rather than following it.”
Bitcoin Derivatives Market In A Regime Of Caution
On-chain analyst Axel Adler Jr. approached the same backdrop from a more defensive angle. In his April 23 market , he argued that Bitcoin’s derivatives structure is “rapidly losing its bullish structure” as the short-term futures premium over spot nearly disappears. The 7-day basis SMA dropped from +0.465% to +0.054% in just four days, while the funding rate 7DMA remained negative at -0.00945%.
Q&A
What is the 'disbelief phase' in Bitcoin trading?
The 'disbelief phase' refers to a situation where traders remain skeptical about a price rally, continuing to short the asset despite its upward movement.
How are Binance funding rates affecting Bitcoin's price?
Negative Binance funding rates indicate that traders are leaning short, suggesting a disconnect between market sentiment and Bitcoin's rising price.
What does a negative funding rate mean for Bitcoin traders?
A negative funding rate means that short positions are more prevalent, which can create a fragile market structure but may also lead to a price surge if these positions are unwound.
Why is the divergence between price and trader sentiment significant?
This divergence highlights a lack of broad conviction in the rally, which could either signal a potential market correction or provide fuel for further price increases if shorts are forced to cover.
