Bitcoin Struggles Below $70K Amid Negative Funding Rates and Market Uncertainty
By John Nada·Feb 17, 2026·5 min read
Bitcoin's futures funding rates have turned negative, indicating a lack of bullish conviction as uncertainty in AI investments drives market caution.
Bitcoin's futures funding rates have dipped into negative territory, revealing a lack of conviction among bullish traders to leverage positions. This shift comes as uncertainty around the profitability of artificial intelligence investments drives investors towards safer assets like gold and US government bonds. The current market landscape underscores a significant pivot for Bitcoin, as it struggles to regain the $70,000 level amidst a backdrop of investor caution and shifting priorities.
The inability of Bitcoin to reclaim the $70,000 threshold on Tuesday was notably accompanied by a decline in S&P 500 futures, further amplifying the sense of market unease. Many traders are expressing growing concerns regarding the maturation timeline for investments in the AI sector. This hesitance is palpable, especially as tech giants such as Nvidia, Apple, and Google have experienced substantial pressure in their stock prices, reflecting a broader bearish sentiment that has crept into Bitcoin futures as well.
The annualized funding rate for Bitcoin futures briefly flipped negative, which typically indicates waning demand for leveraged long positions. Under normal circumstances, this rate ranges between 6% and 12%, emphasizing the current hesitance among bulls. The recent dominance of precious metals, particularly silver and gold, has created a stark contrast for Bitcoin investors. Over the past two months, these metals have outperformed Bitcoin, further exacerbating investor disappointment. As silver and gold emerged as clear winners during this tumultuous period, Bitcoin's struggles have become increasingly pronounced.
As investors flock to safer havens, the performance of the stock market has entered a consolidation period, leading to a stagnation in gains for the tech sector. Some analysts have raised concerns that valuations in this sector have become excessively inflated, while others argue that the efficiency gains promised by AI are finally beginning to materialize. Regardless of the differing perspectives, the overarching trend has been a movement towards risk-averse behavior among investors, pushing them to seek protection in government bonds.
The yields on the 10-year US Treasury recently declined to their lowest levels since November 2025, signaling a surge in demand for these bonds. This trend does not necessarily reflect a heightened confidence in the Federal Reserve's strategy to navigate a potential recession without triggering inflation. In fact, the US dollar has weakened against a basket of foreign currencies, as illustrated by the DXY index. This backdrop of macroeconomic uncertainty has undoubtedly played a role in shaping investor sentiment and market dynamics.
Dario Amodei, co-founder and CEO of Anthropic, weighed in on the current state of AI investments, expressing skepticism about their immediate profitability. His remarks on Friday highlighted the challenges of rapidly building data centers and delivering the anticipated computing power, as he noted that achieving $10 trillion of compute by mid-2027 is implausible due to existing capacity constraints. This skepticism resonates with broader market concerns, contributing to a more cautious approach among traders, particularly within the Bitcoin options market.
The BTC options market reveals a stabilization of demand for neutral-to-bearish strategies, indicating a cautious sentiment among market participants. The panic that ensued following Bitcoin's unexpected price crash to $60,200 on February 6 has largely subsided. However, traders remain hesitant to adopt a bullish stance, as evidenced by the BTC options put-to-call ratio at Deribit, which stood at 0.8x on Monday. This figure indicates a balanced demand between put (sell) and call (buy) instruments, contrasting sharply with the 1.5x ratio observed just a week prior, a level typically considered bearish.
This shift in the put-to-call ratio suggests that while traders are not currently in a panic state, they are also far from bullish. The cautious approach adopted by traders may stem from a desire to take profits after Bitcoin briefly flirted with the $70,000 mark. Additionally, the recent holidays in the US and China have contributed to a slowdown in market activity, further amplifying the subdued sentiment across the board.
Despite the current negative funding rate, it is critical to note that this does not inherently indicate an impending decline for Bitcoin. Instead, establishing a sustainable bullish momentum will likely hinge on a reduction in macroeconomic uncertainty that presently looms large over the markets. The interplay between investor sentiment, macroeconomic indicators, and market performance will be crucial in determining Bitcoin's trajectory in the near future.
As the market navigates through these turbulent waters, the sentiment surrounding Bitcoin and its future remains a topic of keen interest. The ongoing struggle to maintain its value and the challenges posed by external economic factors will continue to shape the discourse around Bitcoin. Investors are left weighing the risks and rewards in an environment defined by uncertainty and shifting dynamics in the tech sector and beyond.
While the current landscape presents challenges for Bitcoin, it also offers an opportunity for traders and investors to reassess their strategies. The potential for recovery and growth remains, but it will require a careful analysis of market conditions and a strategic approach to navigating the complexities of the financial landscape. Market participants are urged to keep a close eye on developments in the AI sector, macroeconomic indicators, and broader market trends as they chart their path forward.