🎧 Morning Brief #160 - audio debate on today’s market setup
Regime Score returned to the bear zone after a two-week Bull impulse in mid-April, and the 7-day cumulative funding rate updated its annual low. This means the derivatives market is persistently skewed toward shorts. Two charts show why price managed to recover toward $77-79K, but the market has not yet given a structural bullish signal.
TL;DR
Regime Score shows that after a short Bull spike in early April, the market ran into bearish pressure again. The key factor is the funding rate: the derivatives market remains skewed toward shorts, and this is holding back any growth impulse.
Bitcoin Regime Score
Bitcoin Regime Score is a composite indicator that combines six on-chain and derivatives metrics into a single signal ranging from -100 to +100. Values above zero indicate a bull regime, below zero - a bear regime.
In early April, the metric recovered from negative territory and during April 9-11 climbed to +38-39, entering a confident Bull zone. This coincided with a price bounce from $66-67K to $72-78K. However, the market failed to hold the impulse. From April 24, the score reversed lower and by April 29 dropped to -18, partially recovering to -7 on April 30. At the same time, price held in the $75-79K range through the end of the month, while the score itself remained below zero. The divergence between price and the internal market structure became apparent.
This behavior points to a weak structure: price holds, but internal metrics do not confirm continued growth. For a return to a sustained Bull regime, the score needs not just to rise above zero, but to hold above +20 alongside neutral or positive funding.
Bitcoin Price + Funding Rate Cumulative 7d
The 7-day cumulative funding rate reflects the balance between longs and shorts in the perpetual futures market. Positive values mean longs pay shorts, which typically signals overheating. Negative values mean shorts pay longs - that is, the market is either betting against growth or actively hedging.
In April, funding posted its worst readings of the entire past year. The low was recorded on April 26 at -659 bps. From April 14 to April 26, cumulative funding held in the range of -520 to -660, indicating sustained dominance of short positions for nearly two weeks in a row. At the same time, price during that period was trading in the $74-79K range. In other words, shorts were being added against a recovering price. By April 30, funding began exiting the extreme zone and recovered to -199, and on May 1 contracted further to -166. This points to the beginning of normalization, but not yet a full reversal.
The connection to the first chart: negative funding remained the primary component keeping Regime Score in negative territory at the end of April, despite price recovery and a neutral trend. Until funding returns to zero and holds in positive territory, any rally will face structural resistance from the derivatives market.
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FAQ
What does negative funding mean - is it good or bad for bulls? Negative funding by itself means the market is skewed toward shorts: participants are paying to bet against growth. This is a dual signal. On one hand, it reflects structural weakness and downward pressure on price. On the other hand, when extreme levels are reached - such as -600 bps and below - the market historically becomes vulnerable to a short squeeze, a sharp rally driven by forced closure of short positions.
Under what conditions will Regime Score return to a sustained Bull regime? This requires two conditions to be met simultaneously: funding must neutralize and hold above zero, and taker imbalance must sustainably shift into positive territory. Right now funding is moving in the right direction, but the market still needs to confirm this over the next 3-5 trading days.
CONCLUSIONS
April 2026 recorded a divergence: price recovered from $66K to $79K, but Regime Score ended the month in negative territory, and the 7-day cumulative funding rate reached an annual low at -659 bps. The market structure remains bearish - not because of price itself, but because of positioning in derivatives.
For now there is only one positive signal: funding has started to exit the extremely negative zone. If this normalization continues, the market may get the conditions for a short squeeze and a return of Regime Score above +20. The primary risk remains the same: if price fails to hold $75K amid a new pressure spike, funding will move deep into negative territory again and the score will anchor in the Bear zone for a longer period.
Further Reading
- Bitcoin Funding Rates: Definition, Formula & Cycle Signals
- Bitcoin Open Interest and Funding Rate: The Combined Framework for Reading Derivatives Markets
- Bitcoin Open Interest & Leverage Ratio
- Bitcoin Liquidation Cascade: How It Works, Why It Happens & How to Predict It
- Bitcoin Exchange Netflow: What It Is and How to Use It