With Nasdaq Futures Falling 700 Points, Bitcoin Funding Rates Turn Bearish

Bitcoin market sentiment has turned bearish amid a 700-point drop in Nasdaq futures, as risk aversion takes hold. The decline is fueled by concerns over DeepSeek, a Chinese AI startup that could challenge U.S. dominance in the tech sector.

According to Velo Data, bitcoin’s perpetual futures funding rates have flipped negative, indicating more pessimism in the market. Traders are increasingly taking short positions, expecting a further drop in price.

Bitcoin has fallen more than 3% since early Asian trading hours, briefly dipping below $98,000. Meanwhile, Nasdaq futures have lost over 3.5%, with NVIDIA — a leader in the AI space — seeing a 10% decline in pre-market trading.

“The downturn follows President Donald Trump’s recent approval of a crypto policy working group, though without confirmation of a U.S. bitcoin reserve,” said Petr Kozyakov, CEO of Mercuryo. “Meanwhile, the emergence of DeepSeek is worrying tech investors, as it suggests AI models can be built more cost-effectively outside the U.S.”

Historically, a negative funding rate has signaled a potential market bottom. However, with the funding rate only slightly negative, it’s still too early to declare that the short Bitcoin trade is overcrowded, leaving room for a possible short squeeze.