Crypto Market Bearish Despite Neutral Funding Rates

The crypto market has been experiencing a bearish trend despite neutral funding rates, indicating a cautious sentiment among traders. The Crypto Fear & Greed Index has shifted to "Neutral," reflecting shaken confidence in the market. This sentiment is influenced by geopolitical uncertainties and other market uncertainties, which have driven a growing bearish sentiment among traders.

Bitcoin, the largest cryptocurrency by market capitalization, has seen significant volatility, with its price fluctuating within a narrow range. From June 14 to June 20, 2025, Bitcoin's price movements were characterized by a market structure of "highs blocked, fluctuating downwards." The price briefly rose to $105,889 on June 14 but faced technical corrections and downward pressure, ultimately closing at $104,867. The following days saw similar patterns of fluctuation and consolidation, with the price ranging between $104,000 and $106,000. On June 16, Bitcoin briefly corrected to $104,572 but quickly turned strong, reaching an intraday high of $107,000. However, the bullish momentum was short-lived, and the price began to decline, closing at $107,486. The subsequent days saw continued weakness, with the price dropping to new lows and struggling to maintain upward momentum. By June 20, Bitcoin was trading around $104,700, with the overall trend still in a narrow fluctuation range.

The bearish trend in the crypto market is further supported by low on-chain activity and large holders locking positions. Data shows that the inflow of Bitcoin from whales and retail investors to exchanges has reached a new cycle low, with the number of on-chain transactions dropping to an 18-month low. This reflects a continued cooling of market speculation, with investors preferring to "hold and wait" rather than frequent trading. Additionally, over 20,000 addresses hold Bitcoin worth over $10 million, with a total locked amount nearing $200 billion, accounting for 9.43% of the total supply. This indicates that large holders still have high confidence in the medium to long-term trend, providing structural support for the spot market.

The derivatives market also shows signs of bearish sentiment. The funding rate for Bitcoin perpetual contracts remained positive (+0.0049%) on June 18, indicating that bulls need to pay bears, which represents the mainstream market expectation of bullish sentiment. However, the skew in the options market is significantly tilted towards OTM (out-of-the-money) calls, indicating that capital flow is leaning towards bullish positions, with bullish leveraged positions dominating the market structure. This suggests that while there is some bullish sentiment, it is not strong enough to overcome the overall bearish trend.

The growth in the stablecoin market cap has provided liquidity support for the market. As of June, the total market cap of stablecoins has reached $250 billion, with an average daily on-chain circulation of about $15 billion. The continuous issuance of USDT and USDC has enhanced market liquidity, providing liquidity support for the rise of both spot and derivatives markets. This has become a direct medium for new capital entering the market, helping to stabilize prices and reduce volatility.

The technical indicators also support the bearish trend. Bitcoin's 14-day Relative Strength Index (RSI) was 55.528 as of June 20, in the "neutral to strong" range (50--70). This indicates that market momentum is gradually recovering, with buying sentiment moderately rebounding, but it has not yet entered an overbought state. The Moving Average (MA) analysis shows that the current price is below both the MA5 and MA20, indicating a slightly bearish short-term trend, with short-term price pressure and certain downside risks. However, the price remains significantly above the MA50, MA100, and MA200, indicating that the medium to long-term trend still maintains an upward structure. The Moving Average Convergence Divergence (MACD) analysis shows that the fast line is currently below the slow line, with a difference of -17, indicating that market momentum is still in a downward range. The histogram shows a gradually contracting shape, indicating that bearish momentum is weakening and approaching the crossover point.

The overall market sentiment remains cautious, with the Fear and Greed Index reporting 48, placing it in the "Neutral" range. This indicates that overall market sentiment is in a wait-and-see state, with investors neither showing strong greed nor significant panic, leading to more rational trading decisions. The macroeconomic background also contributes to the bearish trend. The Federal Reserve maintained interest rates at 5.25--5.50% on June 18, but the dot plot showed only one expected rate cut for the year, significantly tightening from the "two rate cuts" expectation in March. This hawkish tone weakened market expectations for liquidity expansion and suppressed Bitcoin's upward momentum in the short term, leading the market to a wait-and-see stance. Additionally, escalating tensions in the Middle East and rising oil prices have raised risk aversion and inflation concerns, further suppressing Bitcoin's price.

In summary, the crypto market has maintained a bearish trend amid neutral funding rates, with traders adopting a cautious approach due to geopolitical uncertainties and other market uncertainties. The technical indicators and market sentiment support this bearish trend, with the overall market awaiting further guidance from trading volume and macro sentiment.