• Bitcoin funding rates turned positive after 84 consecutive days, ending the longest sustained period of negative sentiment in the 2020s.
• The top crypto gained 14.5% during the extended negative funding period, indicating resilient spot demand despite persistent bearish derivatives positioning.
• Bitcoin ETFs recorded more than $2 billion in net outflows over the past two weeks, signaling cooling of institutional demand.

Bitcoin (BTC) showed early signs of recovery last week after the 30-day average funding rates turned positive, ending 84 days of negative funding, the longest ever seen in the 2020s.

The shift reflects a gradual change in sentiment among traders, even as broader market participation remains subdued, according to a Tuesday report from K33 Research.

Bitcoin ends record negative funding streak after 84 days

Negative funding environments often stem from a shift to defensive positioning among traders, according to the report. K33 noted that such trends historically accompany periods of limited downside, suggesting the possibility of renewed upward momentum.

"These periods have generally coincided with limited downside in BTC, while the transition back to positive funding has historically marked constructive, though often gradual, recovery periods," K33's Head of Research, Vetle Lunde, wrote.

However, spot trading volumes have declined to lows last seen in December, reflecting a lack of strong conviction from both retail and institutional investors. The firm added that this is the lowest spot volume within a rolling 7-day window since February 2024.

"The strongest daily spot volume within any rolling 7-day window has not been this low since February 7, 2024, underscoring the notably drowsy market of late," K33 wrote.

Bitcoin exchange-traded product (ETP) holdings have also returned to levels last seen in February, further highlighting the slowdown in sustained capital inflows.

"The stronger relationship between ETP flows and BTC returns likely reflects a fading influence from other supply-side factors, particularly on-chain selling pressure. The weaker relationship observed in 2025 likely stemmed from unusually heavy distribution from long-term holders while BTC traded near all-time highs," the firm added.

Wintermute's data reinforces this narrative, pointing to a clear pullback in institutional demand. Spot Bitcoin ETFs recorded approximately $1.26 billion in outflows over the past week, marking a second consecutive week and pushing total outflows to over $2 billion in just 14 days. 

This comes after six weeks of consistent inflows that helped drive Bitcoin from $70,000 to $80,000 in April.

"Two weeks of $1B+ ETF outflows after six weeks of inflows tells you institutions are using strength to crystalize some of the most recent +ve price performance," Wintermute noted.

The firm added that institutional buying pressure, which had previously supported upward price action, has now reversed as investors reassess capital at current levels.

The shift is particularly notable given improving macroeconomic conditions, including easing yields and continued strength in equity markets, especially in AI-related sectors. Under normal circumstances, such an environment would be expected to support crypto assets, but Bitcoin has yet to respond meaningfully.

Meanwhile, activity in the altcoin market remains selective. Wintermute stated that HYPE stands out with strong inflows and accumulation trends, suggesting it may be decoupling from the broader market.