Bitcoin Funding Rates Drop 1.3% Annualized Amid Cautious Market Sentiment Ethereum Leverage Demand Surges 18.3%

Market sentiment remains exceptionally cautious despite Bitcoin's price recovery to near its all-time high of $110,000. Traders are displaying a general lack of risk appetite, as indicated by the Head of Research at K33, Vetle Lunde. This cautious sentiment is reflected in the funding rate indicators, which show that Binance's BTC/USDT perpetual futures experienced a negative daily funding rate on both last Friday and Sunday, with a weekly funding rate of just 1.3% annualized. Such conditions typically occur near localized bottoms, and historical data suggests that Bitcoin does not peak during periods of negative funding rates. This positioning often signals further upside potential ahead.

Meanwhile, Ethereum speculators are showing a strong appetite for leverage. The 2x leveraged ETH ETF by VolatilityShares is gaining increasing popularity. Since April 8, the fund has added an exposure equivalent to 305,100 ETH, which accounts for 18.3% of U.S. ETH ETF holdings and two-thirds of CME ETH open interest. This surge in leverage demand for Ethereum indicates a bullish sentiment among traders, despite the overall cautious market sentiment.

Alexia Theodorou, Head of Derivatives at Kraken, added that although funding rates are slightly bullish, the market has not yet formed a clear directional consensus. The long/short ratio is still far below January's peaks, indicating a lack of strong directional bias. A more DeFi-friendly stance from U.S. regulators could act as a structural tailwind for ETH in the upcoming months, potentially driving further demand and price appreciation for Ethereum.