• Binance Funding Rates drop as short positions rise despite Bitcoin’s price stability.
• On-chain activity weakens while valuation metrics spike, raising correction concerns.

Bitcoin [BTC] hovered well above $100K on the 7th of July, but a strange divergence emerged—Binance Funding Rates turned negative during an uptrend.

This implied that traders are aggressively opening short positions, betting on a reversal.

Naturally, this opens the door to a potential short squeeze, where forced liquidations drive prices higher. Historically, when Funding Rates dip while price holds firm, bears tend to get burned.

Of course, this isn’t a guarantee, but the imbalance tipped the market structure toward bulls, as long as momentum holds and shorts stay crowded.

Why are BTC users vanishing?

Having said that, things weren’t rosy across the board.

Bitcoin’s on-chain activity shriveled. Transaction Count fell to 50.3K, while Network Growth slumped to 57.6K—both multi-month lows.

This contraction pointed to waning participation, likely due to cautious retail sentiment or sidelined users amid elevated prices.

When fewer new users join and fewer transactions occur, it typically reflects retail caution or fatigue at high prices.

In fact, such dual declines often precede local slowdowns—unless reversed quickly. The rally needs more than just strong hands; it needs new ones joining in.