VanEck Analysts: Bitcoin Shows Two Historical Bullish Signals of Hash Rate Decline and Negative Funding Rate

On April 26, VanEck analysts Matthew Sigel and Patrick Bush published an analysis stating that Bitcoin has exhibited two historically bullish signals: a negative funding rate and a decline in hash rate concentration, while volatility has cooled down. With the easing of tensions between the U.S. and Iran, Bitcoin’s realized volatility has dropped from 56% to 41%, and the 7-day average funding rate has turned negative at -1.8%, marking the lowest level since the beginning of 2023. Historical data indicates that a negative funding rate typically signals strong future returns: since 2020, the average 30-day return for Bitcoin during periods of negative funding rates has been +11.5%, compared to an overall return of +4.5%, with a hit rate of 77%. Funding rates below -5% have yielded +19.4% returns over a 30-day period. Additionally, hash rate has decreased to the 16th percentile in the past 30 days, marking the most concentrated decline since the mining ban in 2021. In the last seven instances of hash rate decline, six saw Bitcoin prices increase after 90 days, with a median increase of +37.7%.