Bitcoin Market Sentiment Shifts Amidst Nasdaq Stock Market Decline

Bitcoin Funding Rates Flip Negative as Nasdaq Futures Tank 700 Points

The renewed bearish flip in funding rates comes amid risk-off in Wall Street‘s tech-heavy Nasdaq index.

Market Sentiment Turns Bearish

Bitcoin (BTC) market sentiment has turned bearish, with Wall Street’s tech-heavy Nasdaq futures trading 700 points lower. The risk aversion is driven by concerns that the cost-effective Chinese artificial intelligence startup DeepSeek could significantly challenge U.S. technological dominance.

Funding Rates Flip Negative

Bitcoin‘s perpetual futures funding rates have flipped negative, according to data source Velo Data. This is a sign of more bearish sentiment in the market – traders are chasing short positions in anticipation of lower prices. The leading cryptocurrency by market value has dropped over 3% since early Asian hours, reaching lows under $98,000 at one point, according to CoinDesk data.

Nasdaq Futures Bleed 3.5%

Futures tied to Nasdaq have dropped over 3.5%, with NVIDIA, the bell-wether for all things AI, down 10% in pre-market trading. Petr Kozyakov, co-founder and CEO at Mercuryo, said that today’s sell-off comes after President Donald Trump last week gave the green light to a working group on crypto policy that notably stopped short of confirming that the US would set up a bitcoin reserve.

Historical Context

Historically, however, the negative flip in funding rates has tended to mark local price bottoms. Besides, there is always a risk of a short squeeze – bears throwing in the towel and squaring off their bets, putting upward pressure on prices. That said, the funding rate has narrowly flipped bearish, meaning it’s too early to call short BTC as an overcrowded trade.