Crypto Funding Rates Hit Lowest Since 2022 Crash

• Funding rates reach lowest point since the 2022 crypto crash
• Major leverage wipeout signals risk-off market sentiment
• Glassnode calls it one of the sharpest resets in crypto history

Historic Leverage Reset Shakes the Crypto Market

Funding rates across the crypto market have plunged to their lowest levels since the 2022 crash, signaling a massive shakeout of leveraged positions. According to blockchain analytics firm Glassnode, this is one of the most severe leverage resets in crypto history.

Funding rates are a key metric in perpetual futures markets, reflecting the cost of holding long or short positions. When rates drop significantly, it typically means traders are unwinding long positions, and speculative excess is being flushed out of the system.

Glassnode’s data shows a deep reset in market structure, with excessive leverage being forcefully removed following recent price volatility. This rare event is often seen as a healthy reset, laying the groundwork for a more sustainable recovery.

What It Means for Traders and Investors

The sharp drop in funding rates indicates a major shift in sentiment from greed to caution. With over-leveraged positions liquidated and the cost of margin trading reduced, the market may now be entering a phase of lower volatility and organic accumulation.

Retail and institutional investors alike are likely to approach the market with renewed discipline. While painful in the short term, such leverage wipeouts historically serve as a reset button—clearing speculative noise and allowing stronger fundamentals to take the lead.

The last time funding rates hit these lows was during the 2022 crypto crash, which eventually gave way to a more stable market and long-term accumulation by smart money.

Is the Bottom In?

While no one can perfectly time market bottoms, extreme funding rate lows are often correlated with market bottoms or consolidation phases. The recent reset could signal that the worst of the volatility is over—at least for now.

Investors should remain cautious but aware that historically, such deep resets have presented strategic entry points for long-term positions. As the market stabilizes, on-chain activity and investor behavior will be key metrics to watch.

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