Crypto Market Bearish Trend Persists as Funding Rates Drop Below 0.005%

The cryptocurrency market has been experiencing a bearish trend, with low funding rates on major exchanges affecting market sentiment and trading patterns. Ethereum and Bitcoin, two of the most prominent cryptocurrencies, have been under significant pressure, with their values declining in June 2025. The low funding rates, which have remained below the 0.005% threshold, indicate a lack of bullish conviction among investors.

This bearish momentum is reflected in the falling prices of major cryptocurrencies and the shifting of institutional flows. Institutional crypto ETP inflows have decreased by 2.7% year-over-year, signaling a cautious investment behavior among institutional investors. The low funding rates also suggest a maturing derivatives market, with a 90% drop in extreme funding rate events since 2016. This trend is particularly notable in the data from 2024–2025, which shows remarkable stability even as Bitcoin surged past $100,000. This indicates a clear maturation of the crypto market, transforming Bitcoin from a highly speculative asset into a more stable financial instrument.

Historical comparisons reveal similar bear markets from 2021, with continued market maturity indicated by stable funding rates and institutional presence. The sustained low rates could hasten market adaptations and shifts toward stability, necessitating investor caution and strategic foresight. Potential outcomes include technological innovations within the decentralized exchange framework and regulatory pressures influencing the financial markets.