Summary BTC realized volatility dropped from 56% to 41% as US-Iran tensions eased, while the 7-day average funding rate turned negative to -1.8%, its lowest reading since 2023. Since 2020, 30-day BTC returns during negative funding periods averaged +11.5% versus +4.5% overall, with a 77% hit rate. Sub -5% funding has produced +19.4% returns on 30-day horizons. Hash rate has declined to the 16th percentile over 30 days, marking the densest concentration of episodes since China’s 2021 mining ban. In 6 of 7 past drawdowns, BTC was higher 90 days later with a median gain of +37.7%. Two historically bullish signals are flashing on bitcoin: negative funding rates and a clustered hash rate drawdown, as volatility cools. Weekly Bitcoin ETP Flows ((USD)) Source: Glassnode as of 4/15/2026. Past performance is not a guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein. Following 5 consecutive weeks of outflows from 1/24 through 2/21 totaling roughly -$4B, spot bitcoin ETP (BTC-USD) flows reversed in late February and have been net positive in 6 of the last 7 weeks through 4/11. Funding Rates Turn Negative: A Contrarian Buy Signal Bitcoin price action was energetic over the past 30 days, with several 20% drawdowns and rallies amid the US-Iran conflict. As a ceasefire materialized, BTC realized volatility tumbled from a period high of ~56% to settle around ~41%. Low sentiment on bitcoin pressured the 30-day moving average ((MA)) annualized funding rate ((FR)) to 2.1%, down from 2.7% 30 days earlier. The funding rate now stands at the 10th percentile since November 2020. On a shorter timeframe, the 7-day MA bitcoin funding rate turned negative, hitting its lowest levels since 2023 at (-1.8%). Examining instances since 2020 where 7-day bitcoin funding rates turned negative, there is a substantial uplift in average returns as well as a higher probability of positive returns across 30-day, 60-day, 90-day, and 180-day horizons. The mean return uplift for negative FR periods was +630 basis points (bps), and the data show this uplift scales inversely with the depth of negative funding. For context, the mean 30-day BTC return since 2020 is +4.5%, while the mean 30-day return for negative FR periods was +11.5% with a 77% hit rate. When bitcoin funding dropped below -5% annualized, BTC showed a +19.4% return (+1,400 bps uplift) on 30-day periods and a +70% return (+2,900 bps uplift) on 180-day horizons. Negative FR days produced 19 of the top 50 180-day return periods since 2020, despite occurring only 13.6% of the time. Five of the top 10 single-day BTC returns occurred after purchasing during negative funding periods, as did 10 of the top 20. Options Positioning: Hedging at Peak Bearishness Put premiums reached all-time highs over the last 30 days, reflecting a peak in hedging and bearish positioning. On a relative basis, put premiums paid as a share of BTC spot volume surged +120% year-over-year to reach 10 bps and were up +21% versus the prior 30-day period. On an absolute basis, the 7-day MA for put premiums paid is up +19% month-over-month but has come down -71% since its peak on 3/30. While peak absolute bearishness may have passed, investors remain meaningfully bearish on BTC in relative terms. Put Premiums to Spot Volume More Than 6x Higher Than April 2024 Source: Glassnode as of 4/17/2026. Past performance is not a guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein. Onchain Activity and Long-Term Holder Behavior Bitcoin network onchain activity was generally lower over the past 30 days. Daily transactions surged +22% month-over-month to 545k, reaching the 96th percentile all-time. Despite that jump in volume, daily active addresses slipped -3% month-over-month (51st percentile), while new addresses were down -2% month-over-month. Transfer volume recorded $48.5B/day (81st percentile), down -5% month-over-month as positioning flux dropped alongside volatility declines. The share of active supply in the last 180 days dipped -160 bps to 28.4% (34th percentile), suggesting an increasing tendency toward holder dormancy. Average daily fees dropped -5% month-over-month to ~$169k (49thpercentile) and are down -66% year-over-year, while mean transaction fees fell -22% month-over-month to $0.31 (48thpercentile), well below the $1.27 level from a year ago. Spent Volume Ticked Up for All Long-Term Holders in April m/m Source: Glassnode as of 4/17/2026. Past performance is not a guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein. Note: Many assume “spent volumes” are a good proxy for BTC sales. However, not all long-dormant coin movements represent selling. Some transfers are sent to quantum-resistant addresses, others are contributions to digital asset treasuries (DATs), and some reflect routine wallet maintenance. The most recent 30-day period shows a broad rebound in spent volume across all holding cohorts. The younger end of the long-term holders (1y-2y, 2y-3y, 3y-5y) sent more bitcoin, up +47%, +52%, and +26% month-over-month, respectively, but their activity was -22%, -24%, and -71% below their 12-month averages. Over the past 4 weeks, the 3y-5y group sent the second-smallest amount of bitcoin since December 2023. As spikes in transfer volumes in the 3y-5y group tend to coincide with 4-year cycle traders, it is logical to see these figures pare back as prices wind down and the cycle resets. Longer-term supply holders increased transfer activity over the last 30 days. The 5y-7y, 7y-10y, and 10y+ segments sent 72k, 45k, and 18k BTC in the trailing 30-day period, amounting to +67%, +87%, and +285% above each group’s respective 12-month average. The longest-term holders, the 7y-10y and the 10y+, respectively, reached the 85th and 90th percentiles of transfer activity over the past four years. Difficulty Rate Volatility Hits Highest Level Since 2021 China Mining Ban Source: Glassnode as of 4/20/2026. Past performance is not a guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein. Mining Dynamics: Hash Rate Drawdown Signals Bullish Setup Over the past few months, hash rate and Bitcoin network mining difficulty dropped asymmetrically, with difficulty falling further than hash rate. While this may signal network churn, it is typically associated with above-average forward returns for bitcoin. The 30-day change in hash rate MA has declined to the 16th percentile over 30 days and 9th percentile over 90 days, while the change in difficulty MA is even weaker at the 5th and 6th percentiles, respectively. More striking is the clustering: 3 sustained hash rate decline episodes have occurred in just the past 5 months (December 2025, January-February 2026, March-April 2026). This is the densest concentration of drops since China’s mining ban in 2021. In absolute terms, both metrics remain well below their recent peaks. The hash rate 30-day MA currently sits at 985.5 EH/s, down -7.5% from its all-time high of 1,065.7 EH/s set in late November 2025. Difficulty has declined -10.5% below its November 2025 peaks. Difficulty falling more than hash rate generally reflects the algorithm’s lagging adjustment mechanism and miner volatility. As marginal miners exited through 3 successive episodes, difficulty stepped down in discrete two-week resets and has not yet re-equilibrated to the recovering hash rate. Encouragingly, the most recent episodes are shorter and shallower. The January-February 2026 episode lasted 31 days with a peak change in hash rate of -10.9%, while the March-April 2026 episode lasted just 16 days with a peak decline of -6.7%, ending on April 15, 2026. Across the 7 completed sustained decline episodes on record (excluding the 3 most recent, which lack sufficient forward data), the difficulty adjustment mechanism has acted as a stabilizer, giving surviving miners margin relief that encourages long-term hash rate growth. In 6 of those 7 hash rate drawdown episodes, BTC price was higher 90 days after the episode ended, with a median gain of +37.7% (+2,000 bps uplift). Over 180 days, the median return was +63.1% (+2,190 bps uplift), ranging from -3.5% in June 2022 (the only loss in the dataset) to +199.3% in October 2020. Stepping back, we have identified two strong bullish indicators based on historical data. Both mining rate drawdowns and negative funding rates have been associated with strong forward BTC returns. As such, we have become increasingly bullish on bitcoin. Frequently Asked Questions What is the Bitcoin funding rate, and why does it matter? The Bitcoin funding rate is the periodic payment exchanged between long and short traders in perpetual futures contracts, reflecting whether bullish or bearish positioning dominates. Negative funding rates indicate short traders are paying longs, historically a contrarian signal. Since 2020, 30-day BTC returns during negative funding periods have averaged +11.5% versus +4.5% overall. What does a drop in Bitcoin hash rate mean for the network and price? A drop in hash rate typically indicates that marginal miners are turning off rigs as profitability compresses. While it may signal short-term network stress, historical data show that sustained hash rate drawdowns have been associated with above-average forward BTC returns. In 6 of 7 completed drawdown episodes since 2017, BTC was higher 90 days later, with a median gain of +37.7%. Why do long-term Bitcoin holders’ spending patterns matter? Spent volume by long-term holder cohorts can signal cyclical selling pressure or accumulation. Younger long-term holders (1y-5y) often correlate with 4-year cycle activity, while the longest-term cohorts (7y-10y, 10y+) rarely transact. When older cohorts increase spending, it can indicate profit-taking from some of the most seasoned bitcoin investors, though not all long-dormant movements represent selling. Disclosures Definitions Bitcoin ((BTC)) is a decentralized digital currency without a central bank or single administrator. It can be sent from user to user on the peer-to-peer Bitcoin network without intermediaries. Funding rate is the periodic payment exchanged between long and short positions in perpetual futures contracts, used to keep the contract price aligned with the underlying spot price. Hash rate is the total computational power being used to mine and process transactions on the Bitcoin network, typically measured in exahashes per second (EH/s). Digital Asset Treasuries (DATs) are publicly traded companies that hold significant portions of their balance sheet in digital assets such as Bitcoin, often using debt or equity issuance to fund purchases. Index performance is not representative of fund performance. It is not possible to invest directly in an index. Risk Considerations This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Investments in digital assets and Web3 companies are highly speculative and involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility and limited liquidity, including but not limited to, inability to liquidate a position; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets. Digital asset prices are highly volatile, and the value of digital assets, and Web3 companies, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss of your entire principal investment. Digital assets are not covered by FDIC or SIPC insurance. Digital assets are digital representations of value that function as mediums of exchange, units of account, or stores of value, but they do not have legal tender status. Digital assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are generally not backed or supported by any government or central bank. Web3 companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies. All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance. © Van Eck Associates Corporation. Original Post
