Bitcoin bears are taking over, but BTC still looks bullish – Here’s why

Bitcoin [BTC] traders are getting more bearish with each second! Interestingly, such extreme negativity has so far only come near local bottoms.

With fewer coins available, any change could cause a move up.

BTC Funding Rates fall to long-time lows

Bitcoin’s Funding Rates now at their most negative levels since 2023, according to Glassnode’s 7-day MA. At the time of writing, the metric slipped to the -0.004% to -0.005% range; this is the deepest red stretch in recent times.

Short positions are dominating the market, and traders are betting on a greater fall.

But here’s where it gets interesting. Similar sentiment drops were seen around March 2020, mid-2021, and during the FTX-led collapse in late 2022; all well-known local market bottom phases.

There is no confirmed reversal yet, but bearish sentiment is approaching extreme levels again.

Exchange reserves drop

Meanwhile, exchange reserves have now fallen to around 2.68 million BTC. The decline has been steady since early 2025, when reserves were still above 3.0 million BTC. It’s only sped up since.

Fewer coins on exchanges means fewer coins available to sell in the market. If buying demand returns while reserves remain this low, the story will flip quickly—especially with short positioning already high.

Price action is bullish, though