Recently, Bitcoin's latest rally seems somewhat mild, but the market has split into several factions—some are desperately chasing the surge for fear of missing out, others are waiting for a significant pullback to buy the dip, and some are simply lying flat like ostriches. But behind these appearances, there is actually a key signal that 90% of traders haven't noticed.

Let's start with the basic concept. Funding rates are essentially the cost adjustment mechanism between long and short positions in the derivatives market. Generally speaking, when prices rise, longs dominate, and the funding rate should increase accordingly, which is like longs subsidizing shorts to maintain their positions; conversely, when prices fall, shorts are strong, and the funding rate will decrease.

Now, the situation is interesting. Bitcoin is steadily rising, but the funding rate is falling like a free fall, even approaching negative territory. This is not a minor fluctuation; it’s a clear market signal: don’t be fooled by the surface-level rally.

My judgment is: this wave of upward movement is not caused by market exuberance chasing the rally, but rather by shorts being "counter-operating" and forced to support the price. How to understand this? It’s clear when looking at two core data points.

First, the persistent low funding rates indicate that longs are not following the rally. If it were a bullish market sentiment, retail investors would have flooded in early, and the funding rate would definitely be pushed higher. The current situation is that longs are holding steady, while shorts are actively entering the market—they are betting that this rally will reverse and plan to profit from the pullback by closing their positions.

Second, the number of open contracts is still increasing in tandem. This means that although the price is rising, the new positions are mainly from shorts adding to their shorts, rather than longs expanding their positions. This misalignment usually signals that a sharp correction may occur in the short term.

From another perspective, the current market structure actually provides an important reference: those who truly understand the market have already settled in and are not rushing to chase the high; meanwhile, some bearish forces are increasing their positions, hoping that a decline will bring them gains. This opposition will eventually lead to a fierce collision.