VanEck: Negative funding rate adds to mining difficulty, is the BTC bullish signal flashing?

Source: VanEck April Bitcoin Report; Translation: Golden Finance Claw

Core Highlights:

• As the US-Iran ceasefire agreement calms the market, volatility has eased: With tensions between the US and Iran abating, Bitcoin’s realized volatility has fallen from 56% to 41%, while the 7-day average funding rate has turned negative, dropping to -1.8%, the lowest level since 2023.

• Based on historical data, negative funding rates often signal strong future returns: Since 2020, during periods when the funding rate has been negative, Bitcoin’s 30-day return has averaged +11.5%, versus an overall average return of +4.5%, with a win rate of 77%. When the funding rate is below -5%, the 30-day return is +19.4%.

• Hash rate pullbacks provide a second bullish signal: Bitcoin’s hash rate has fallen to the 16th percentile over the past 30 days—marking the most concentrated period of hash rate decline events since China banned mining in 2021. In the past 7 instances of hash rate pullback, 6 saw Bitcoin’s price rise after 90 days, with a median increase of +37.7%.

Weekly Bitcoin ETP Funding Flows (USD)

Source: Glassnode; data as of April 15, 2026. Past performance is not indicative of future results. Not investment advice and does not constitute a recommendation to buy or sell any security mentioned in this article.

After five consecutive weeks of outflows totaling approximately -$4 billion from January 24 to February 21, spot Bitcoin ETP funding flows reversed in late February. In the past 7 weeks up to April 11, 6 weeks recorded net inflows.

Funding Rate Turns Negative: A Contrarian Buy Signal

Over the past 30 days, Bitcoin’s price action has been highly volatile, with several 20% pullbacks and rebounds during the US-Iran conflict. With the ceasefire agreement reached, Bitcoin’s realized volatility has sharply dropped from the range high of around 56% to around 41%. Weak market sentiment has pushed Bitcoin’s 30-day moving average annualized funding rate down from 2.7% from 30 days ago to 2.1%. The current funding rate is at the 10th percentile since November 2020 (Note: Percentiles are a statistical concept meaning “the proportion of data less than or equal to this value”) . Looking at shorter time frames, Bitcoin’s 7-day moving average funding rate has turned negative, reaching the lowest level since 2023 (-1.8%).

By studying instances since 2020 when Bitcoin’s 7-day funding rate turned negative, it is found that within the time ranges of 30 days, 60 days, 90 days, and 180 days, average returns are significantly higher, and the probability of positive returns is greater. The average return during periods of negative funding rates has increased by +630 basis points, and the data shows that the magnitude of the improvement is inversely related to the depth of the negative funding rate.

For reference, since 2020 Bitcoin’s average 30-day return has been +4.5%. During periods when the funding rate has been negative, the average 30-day return rises to +11.5%, with a win rate of 77%. When the annualized funding rate falls below -5%, Bitcoin’s return over the 30-day window is +19.4% (+1,400 basis points), and over the 180-day window it is +70% (+2,900 basis points). Although the number of days with negative funding rates accounts for only 13.6% of all days, among the best 50 180-day return cycles since 2020, 19 occurred during periods when the funding rate was negative. Among the top 10 best-performing single-day Bitcoin returns, 5 occurred after buying during periods of negative funding rates; and 10 of the top 20 fit this pattern.

Source: VanEck Research, Glassnode; data as of April 15, 2026. Past performance is not indicative of future results. Not investment advice and does not constitute a recommendation to buy or sell any security mentioned in this article.

Options Positioning: Hedging During Extreme Pessimism

Over the past 30 days, put option premiums have reached historic highs, reflecting peak hedging demand and bearish positioning. On a relative basis, the share of paid put option premiums as a proportion of Bitcoin spot trading volume has surged by +120% year-over-year to 10 basis points, and has increased by +21% compared with the prior 30 days. On an absolute basis, the 7-day moving average of paid put option premiums rose by +19% week-over-week, but has fallen by -71% since reaching its peak on March 30. While the peak level of absolute bearish sentiment may have passed, investors remain clearly bearish on Bitcoin from a relative standpoint.

The ratio of put option premiums to spot trading volume is more than 6 times higher in April 2024

Source: Glassnode; data as of April 17, 2026. Past performance is not indicative of future results. Not investment advice and does not constitute a recommendation to buy or sell any security mentioned in this article.

On-Chain Activity and Long-Term Holder Behavior

Over the past 30 days, on-chain activity on the Bitcoin network has generally decreased. Daily transaction volume surged by +22% week-over-week to 545,000 transactions, placing it at the 96th percentile historically. Despite this uptick, the number of daily active addresses fell by -3% week-over-week (51st percentile), and the number of new addresses fell by -2% week-over-week. Transfer volume recorded an average of $48.5 billion per day (81st percentile), down -5% week-over-week, as holding activity declined in tandem with falling volatility.

Over the past 180 days, the share of active supply has decreased by 160 basis points to 28.4% (34th percentile), indicating an increasing tendency for holders to go dormant. Daily fees fell by -5% week-over-week to approximately $169,000 (49th percentile), down -66% year-over-year. Average transaction fees fell by -22% week-over-week to $0.31 (48th percentile), well below the $1.27 from a year earlier.

In April, the spent transaction volume of all long-term holders increased week-over-week

Source: Glassnode; data as of April 17, 2026. Past performance is not indicative of future results. Not investment advice and does not constitute a recommendation to buy or sell any security mentioned in this article.

Note: Many people believe that “spent transaction volume” is a good proxy for Bitcoin selling activity. However, not all token movement from long-term dormancy represents selling. Some transfers are sent to anti-quantum addresses; some reflect contributions to digital asset treasuries; and some reflect routine wallet maintenance.

Over the most recent 30 days, spent transaction volume has rebounded broadly across all holder cohorts. The amount of Bitcoin sent by shorter-term long-term holder cohorts (1–2 years, 2–3 years, 3–5 years) increased by +47%, +52%, and +26% week-over-week, respectively. However, their activity levels are still below their respective 12-month averages by -22%, -24%, and -71%. Over the past 4 weeks, the 3–5 year cohort’s sent volume has been the second lowest since December 2023. Since the surge in transfer volumes from the 3–5 year cohort often coincides with activity from 4-year cycle traders, it is logical that these figures decline as prices pull back and cycles reset.

Longer-term supply holders have increased transfer activity over the past 30 days. In the past 30 days, the 5–7 year, 7–10 year, and over-10-year cohorts sent 72,000, 45,000, and 18,000 BTC, respectively—each higher than its respective 12-month average by +67%, +87%, and +285%. The cohorts with the longest holding periods—7–10 years and over 10 years—saw transfer activity reach the 85th and 90th percentiles, respectively, over the past four years.

Difficulty Volatility Reaches the Highest Level Since China Banned Mining in 2021

Source: Glassnode; data as of April 20, 2026. Past performance is not indicative of future results. Not investment advice and does not constitute a recommendation to buy or sell any security mentioned in this article.

Mining Updates: Hash Rate Pullbacks Signal a Bullish Setup

In recent months, Bitcoin’s hash rate and network mining difficulty have declined asymmetrically, with difficulty decreasing more than hash rate. While this may suggest network changeover, it is often associated with higher-than-average future Bitcoin returns. The change in the 30-day moving average hash rate has dropped to the 16th percentile within 30 days and the 9th percentile within 90 days, whereas the change in the difficulty moving average is weaker, at the 5th and 6th percentiles respectively. Most notably, its level of concentration is striking: within just five months (December 2025, January–February 2026, and March–April 2026), there have been 3 continuous hash rate decline events. This is the most concentrated period of decline events since China banned mining in 2021.

Measured in absolute terms, these two indicators are still far below recent peaks. The current 30-day moving average hash rate is 985.5 EH/s, down -7.5% from the all-time high of 1,065.7 EH/s set in late November 2025. Mining difficulty has decreased by -10.5% from its peak in November 2025. The decline in difficulty exceeds that of hash rate, which typically reflects the lagged adjustment mechanism of the algorithm and miner instability. As marginal miners exit during these three consecutive events, difficulty is gradually brought down through biweekly adjustments, and has not yet rebalanced to the level of the hash rate that is recovering.

Encouragingly, the recent events have been shorter and shallower in duration and magnitude. The January–February 2026 event lasted 31 days, with a peak decline of -10.9%; while the March–April 2026 event lasted only 16 days, with a peak decline of -6.7%, and ended on April 15, 2026. Among the 7 recorded sustained difficulty decline events (excluding the last 3 recent ones that cannot be included in statistics due to insufficient future data), the difficulty adjustment mechanism has acted as a stabilizer—providing profit buffers for surviving miners—thereby supporting long-term hash rate growth.

In these 7 hash rate pullback events, 6 saw Bitcoin’s price rise within 90 days, with a median increase of +37.7% (+2,000 basis points). After 180 days, the median return is +63.1% (+2,190 basis points), ranging from a -3.5% loss in June 2022 (the only negative case focused in the data) to a +199.3% gain in October 2020.

Looking a step back, based on historical data we identify two strong bullish indicators. Hash rate pullbacks by miners and negative funding rates have both previously been associated with robust future Bitcoin returns. Therefore, we are increasingly bullish on Bitcoin.

Frequently Asked Questions

What is the Bitcoin funding rate, and why is it important?

The Bitcoin funding rate is the periodic fee paid between long and short traders in the perpetual contract market, reflecting which side of the bullish or bearish position dominates. A negative funding rate means that shorts are paying longs. Based on historical data, this is a contrarian signal. Since 2020, during periods when the funding rate has been negative, Bitcoin’s 30-day return has averaged +11.5%, versus an overall average return of +4.5%.

What does a decline in Bitcoin hash rate imply for the network and price?

A decline in hash rate typically indicates that marginal miners are shutting down their machines as profitability is squeezed. While this may suggest short-term pressure on the network, historical data shows that sustained hash rate pullbacks have consistently been associated with above-average future Bitcoin returns. Of the 7 pullback events completed since 2017, 6 saw Bitcoin’s price rise after 90 days, with a median increase of +37.7%.

Why is the spending pattern of long-term holders important?

Spent transaction volume across different holding-duration cohorts can foretell cyclical selling pressure or accumulation behavior. Long-term holders with shorter holding times (1–5 years) are often linked to activity in the 4-year cycle, whereas the longest holding cohorts (7–10 years, over 10 years) rarely transact. When older holding cohorts increase spending, it may indicate that some of the most experienced Bitcoin investors are taking profits. However, not all movements of long-dormant tokens represent selling.