Traders Pay to Short Bitcoin (Negative Funding Rates)

Since the week of 13 April 2026, traders have been paying fees to short bitcoin using perpetual swaps. Over the same time, the bitcoin price has risen by about 15%. That’s nearly a month of negative funding rates during a recovery rally – and that doesn’t happen very often.

How bitcoin negative funding rates work

Bitcoin perpetual swaps – or “perps” – let traders go long or short bitcoin with leverage on exchanges like Binance and Bybit. To keep perp prices in line with the actual bitcoin price, exchanges use funding rates. These are small fees paid every 8 hours between long and short traders.

When more traders are long bitcoin perps, longs pay shorts. When more traders are short, shorts pay longs (these are called negative funding rates).

The aggregated funding rate on the chart above tracks the average across major exchanges. It’s been negative for almost four weeks straight – meaning short traders are paying money to stay short. And they’re losing on the price too, with bitcoin grinding higher the whole time.

Why these negative funding rates are unusual

Negative funding rates usually show up during big bitcoin price drops – when shorts pile in during the panic. That’s normal market behavior. What’s less normal is sustained negative funding rates while the price rises.

Look at the weekly chart above. The aggregated funding rate has only been deeply negative a handful of times since 2020. The 2020 Covid crash, 2021 summer drop, and around the 2022 bear market lows. And maybe the funding rates aren’t as negative now, but they’re negative nonetheless.

That tells you many traders think bitcoin should be lower. They’re shorting aggressively, paying fees every 8 hours, and losing on the price. If bitcoin keeps grinding higher, those positions get progressively more expensive to hold. In that case, shorts may have to close their positions (buying back the bitcoin) – or watch the exchange liquidate them.

And as I wrote last week, bitcoin closed April with a bullish morning star candle. 

So you have a (generally) bullish bitcoin chart with negative funding rates. That could be the recipe for a bit of a short squeeze.

As usual, none of this is investment advice. I can be wrong, just like everyone else. To learn more about funding rates, check out our Funding Rate Heatmap Explained guide.