Negative funding rates persist into late December 2025, signaling dominant short positions and bearish bias.
Key drivers: BOJ's recent 0.25% rate hike to 0.75% (highest in 30 years) unwound yen carry trades, reducing global liquidity for risk assets like crypto.
Historical pattern: BTC dropped 20-30% after prior BOJ hikes (2024-2025).
Additional factors: Extreme Fear & Greed Index, rising exchange inflows, ETF outflows, declining perp volumes.
Potential contrarian: Overly negative rates could trigger short squeezes if buying returns. BTC around $87K-88K amid choppy action.
Federal Reserve rate impact on current bearish crypto sentiment (Dec 2025):
Fed funds rate still at 4.25–4.50% after December 2025 meeting (no cut).Markets priced in only ~40% chance of a 25 bps cut in January 2026.Higher-for-longer stance keeps borrowing costs elevated → hurts leverage-heavy crypto positions.Strong USD (DXY near 108) from delayed cuts pressures BTC and altcoins.Reduced risk appetite: investors rotate out of high-beta assets like crypto toward bonds/T-bills.Funding rate flip to negative aligns with macro tightening expectations.
Net effect: Fed’s cautious stance is a major contributor to the current bearish sentiment and negative funding rates. It reinforces short positioning and makes quick bullish reversals less likely unless clear dovish pivot signals emerge.
#CryptoMarketAnalysis @BTC #USJobsData #treding #FundingRate #signalsfutures