As bitcoin futures prices fell below spot prices for the first time since March, the market is filled with fear and confusion. A rare market signal is flashing, and historical experience shows that extreme pessimism is often the prelude to a market rebirth.
When bitcoin futures prices fell below spot prices for the first time since March this year, forming a rare negative basis, the market was shrouded in fear and confusion. This futures discount phenomenon is usually seen as a key signal of exhausted leverage demand and pessimistic market sentiment.
Data shows that the main CME bitcoin futures contract has dropped to $95,430, showing a significant discount compared to the spot price. Behind this seemingly pessimistic market structure, however, lies a historical pattern and opportunity.
I. Futures Premium Disappears, Sentiment Plummets to Freezing Point
The bitcoin futures market is sending a rare signal—the basis has turned negative. This phenomenon means that the trading price of futures contracts is lower than the spot price, revealing a fundamental shift in market risk appetite.
● According to CryptoQuant data, the bitcoin basis has clearly entered negative territory. This change marks that the market has completely erased the optimistic premium represented by the positive basis maintained for several months.
● From a technical perspective, both the 7-day and 30-day moving averages are sloping downward, further confirming that the futures market is dominated by bearish sentiment in the short term.
● Meanwhile, the price of bitcoin has fallen below the key support level of $90,000, dropping 4.48% in the past 24 hours, and the market continues its weak trend, having fallen nearly 30% over the past six weeks.
II. Underlying Logic: Leverage Evaporation and Market Structure Reshaping
● The core of the negative basis phenomenon lies in the sharp contraction of market leverage demand. When traders are no longer willing to hold leveraged long positions, the price of futures contracts falls below the spot price, resulting in a discount.
● This shift in market structure is usually accompanied by panic closing of positions by traders and collective unwinding of long positions. On-chain data analysis shows that bitcoin is currently trading in the "benchmark zone," which typically reflects increased selling pressure or reduced market risk exposure.
● Meanwhile, the BTC-USDT futures leverage ratio has reset to a healthy level of 0.3, indicating that the excessive leverage accumulated at market highs has been effectively cleared out. This decline in leverage actually reduces the risk of large-scale forced liquidations in the future, building a healthier foundation for the market.
III. Historical Mirror: The Hidden Link Between Negative Basis and Market Bottoms
● Historical data reveals a key pattern: since August 2023, every time the 7-day moving average of the bitcoin basis turned negative, it coincided with the bottom range of a bull market correction. This pattern has been repeatedly validated in the past, making the negative basis a sign of the market "taking a deep breath" during a bull run, rather than a death knell for the trend.
● Of course, there are counterexamples in history—such as the negative basis in January 2022, which marked the beginning of a deeper bear market decline. The key to judging the current situation lies in identifying the macro cycle the market is in.
Currently, there is no clear evidence that the market has fully entered a bear market, which means this signal is more likely to indicate a "sharp brake in a bull market" rather than a "downward reversal."
IV. Funding Rate and Market Sentiment Game
● In addition to the basis indicator, the "funding rate" in the perpetual contracts market is another key indicator. When the funding rate is deeply negative, it means the market is filled with short positions, and shorts must pay fees to longs. This extreme situation easily triggers a "short squeeze"—once prices start to rebound, shorts are forced to cover by buying, which can act like rocket fuel and sharply push prices higher.
● On the other hand, on-chain data also provides complex signals. BTC flows within cryptocurrency exchanges have surged recently, which is usually related to large players adjusting positions or liquidity pressures, often accompanied by sharp price fluctuations.
● On the surface, a surge in internal flows is a bearish signal. But when combined with negative basis and negative funding rates, it paints a picture of a "market structure undergoing a violent but healthy cleansing."
V. Historical Performance and Comparison with Current Indicators
● Looking at historical data, the simultaneous occurrence of negative basis and negative funding rates is often not a sustained bear market signal, but rather has repeatedly marked the formation of a stage bottom. The market performance in March 2025 is particularly typical: at that time, bitcoin's funding rate was extremely low, and the market subsequently saw a rise of more than 20%. The current market structure is similar to March 2025, with the funding rate turning negative again and the basis remaining in negative territory.
VI. Key Data and Market Implications
According to the table analysis, multiple indicators show that the market has entered an extreme zone, but there is still no clear reversal signal. The key observation point is the basis rebounding to above the 0% to 0.5% range, which will be the first sign of confidence recovery.
VII. How to Capture Certainty in Market Reversals
The market bottom is a process, not a precise point. Currently, we are in the midst of this process. For investors, identifying the first sign of market confidence recovery is crucial.
● The basis rebounding above the 0% to 0.5% range will be the first sign of confidence recovery. This level will indicate that market confidence is beginning to return and leverage demand is re-entering moderately. For medium- and long-term investors, the current "benchmark zone" offers a rare opportunity to position. Strategically, one should focus on building positions in batches rather than chasing after the market has fully stabilized.
● The focus should not only be on spot, but also on the additional price advantage offered by futures contracts in an extremely negative basis environment. Bitcoin's Net Unrealized Profit (NUP) indicator has dropped to 0.476, the lowest level since April 2025. Historical data shows that when this indicator falls below 0.5, it often signals that short-term market losses are bottoming out.
● Since the beginning of 2024, the 0.47 to 0.48 range has successfully reversed three times: before bitcoin rose from $42,000 to $70,000, before the mid-2024 correction, and recently before the October rebound to $110,000.
As the bitcoin futures basis rebounds above the critical 0%-0.5% range, we will see the first signal of market confidence rebuilding. When the last excessively leveraged trader is flushed out and panic selling exhausts the final selling pressure, the market will reach its most solid bottom.
History does not simply repeat itself, but it often rhymes. At present, the market is at a critical point of long-short transition, and a reversal driven by "short squeeze" and confidence rebuilding may be quietly approaching.
