Bitcoin recently crossed $110,000, setting a new all-time high. But beyond the price rally, there’s something unusual and promising happening in the background.
Funding rates are staying low.
In past bull runs, such a breakout would usually push funding rates into overdrive. But this time, they’ve remained calm. That’s a sign that this rally might be different—and healthier.
In this article, we’ll explain what funding rates are, why they matter, and how today’s stable numbers could indicate a more sustainable bull market.
Funding rates are regular payments between long and short traders in perpetual futures contracts. These contracts don’t expire, so exchanges use funding rates to keep the futures price aligned with the spot price.
In essence, it’s a mechanism that prevents the futures market from drifting too far from reality.
Also Read: Crypto Funding Rates: 7 Powerful Strategies to Maximise Profits & Minimise Costs
Funding rates are a live indicator of trader behaviour:
But extreme funding rates can also indicate excessive leverage. That’s when traders take huge risks, and small price drops can trigger mass liquidations.
In a healthy market, funding rates hover around zero—a sign of balance.
Let’s break it down:
| Funding Rate (per 8 hours) | Market Condition |
| ~0.01% (baseline) | Normal, stable sentiment |
| 0.05% to 0.10% | Elevated risk, rising speculation |
| 0.10%+ | Overheating market |
During the 2020–2021 bull market, funding rates often hit 0.10% or more, which aligned with sharp corrections. Today, the average is back near 0.01%—a far healthier level.
At the time of writing, Bitcoin is sitting at record highs (~$110K), but funding rates remain low. This suggests the rally is being driven by spot buying and institutional demand, not short-term leverage.
Bitcoin’s price might be grabbing headlines, but the real story lies in what’s happening behind the scenes.
Low funding rates = less hype, more stability.
That’s a strong foundation for a long-term rally. For traders and investors alike, it’s a welcome change from the boom-and-bust cycles of the past.
Anush is a crypto researcher dedicated to making blockchain insights clear and accessible. A proud Solana maxi who still appreciates a good Layer 2 debate, he dives deep into market trends so others don’t have to (but really should). Passionate about simplifying crypto, he strives to make the space less intimidating and a lot more relatable, one report at a time.
