Bitcoin has been rising over the past four weeks, but the derivatives market still seems positioned for a downturn. Analysts tracking Binance funding rates and futures basis say traders continue to bet against Bitcoin even as its price climbs. CryptoQuant contributor Darkfost described this on X as a “phase of disbelief” rather than a clear bullish shift. This gap matters because it shows the rally is happening despite ongoing doubt, not because of strong confidence. In crypto, this kind of situation can go either way: it might signal a fragile market, or it could fuel further gains if bearish traders are forced to close their positions.
Darkfost pointed to the 30-day cumulative trend of Binance funding rates as the clearest sign that the market is 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.” He compared this to late 2022, when Bitcoin was just starting to recover from the bear market. At that time, Binance funding rates kept falling and hit as low as -7% on a 30-day cumulative basis. Today, the same indicator is around -4.5%, which he says shows how aggressively traders have continued betting against the price move in recent months.
Darkfost’s point isn’t just that funding is negative, but that this negativity has lasted so long, reflecting a market still trying to resist 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.”
On-chain analyst Axel Adler Jr. looked at the same situation from a more cautious angle. In his April 23 market note, 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 stayed negative at -0.00945%. For Adler, the message is clear: the market is no longer willing to pay extra for long positions. “Basis 7D SMA has sharply compressed and is almost at zero, showing that the futures premium over spot has nearly vanished,” he wrote. “This is not just a local cooldown – it is nearly a complete disappearance of the futures premium over spot. Meanwhile, the 30D SMA remains noticeably higher, around +0.41%, meaning the short-term derivatives structure has deteriorated much faster than the medium-term norm.”
He made a similar point about funding. “What matters is not just the negative reading itself, but its persistence,” Adler said. “This is not a one-off spike or a panic anomaly within a single hour. This is a steady accumulation of bearish positioning, where the market continues to pay for short exposure.”
Taken together, the two analysts are reading the same data from slightly different angles. Darkfost sees disbelief as a potentially positive condition for the ongoing rally, especially if most traders remain heavily against the price trend. Adler sees a market that has lost its bullish premium and is moving into a more cautious phase, unless basis and funding recover. At press time, BTC traded at $77,836. Featured image created with DALL.E, chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs about Bitcoin entering the disbelief phase with traders shorting the rally
BeginnerLevel Questions
1 What does it mean that Bitcoin is in the disbelief phase
It means that even though Bitcoins price is going up most traders dont trust the rally They think its a trap or a shortterm spike so they bet against it by shorting
2 Why are traders shorting Bitcoin if the price is going up
They believe the rally is fake or unsustainable They think the price will crash back down soon so they try to profit from that expected drop
3 Is it normal for people to doubt a Bitcoin rally
Yes In past market cycles disbelief is a common emotional stage It often happens right before a major price surge because only a few people believe in the move at first
4 If everyone is shorting doesnt that mean the price will fall
Not necessarily A lot of shorting can actually push the price higher in a short squeeze If the price keeps rising short sellers are forced to buy back Bitcoin to cover their losses which drives the price up even more
5 Should I buy Bitcoin now because of this disbelief phase
No one can predict the market This phase can lead to a big rally or a sudden crash Only invest what you can afford to lose and do your own research before making any decisions
AdvancedLevel Questions
6 How does the disbelief phase differ from a bear market rally
A bear market rally is a temporary price increase within a longterm downtrend which eventually fails The disbelief phase however often occurs at the start of a new bull cycleskepticism is high but fundamentals support a longer uptrend
7 What is a short squeeze and how does it relate to this phase
A short squeeze happens when a large number of short traders are forced to buy back Bitcoin because the price rises against their bets In a disbelief phase a squeeze can turn a small rally into a violent rapid price spike as shorts paniccover
8 What metrics should I watch to confirm if the disbelief phase is ending