Bitcoin's Sharp Drop Sparks Potential Reversal Amid Bearish Sentiment

Bitcoin experienced a significant decline within the last 24 hours, dropping to nearly $100,000, following high-profile political tensions involving social media exchanges between US President Donald Trump and Tesla CEO Elon Musk. This event has spurred a wave of risk-off sentiment among traders, causing the overall cryptocurrency market capitalization to fall by 4%, from over $3.4 trillion to $3.33 trillion. Derivative market data corroborates this shift, with CryptoQuant analyst Darkfost highlighting a dramatic reversal in trader sentiment on Binance, where net taker volume decreased from $20 million to -$135 million in less than eight hours, the largest intraday reversal this year. Additionally, Bitcoin’s perpetual futures funding rates briefly turned negative, reflecting rising short interest and fear among traders. Historically, such negative funding rates have preceded strong reversals and rallies, with past instances in October 2023, September 2024, and May 2025 resulting in substantial price surges. Although a continued downward move cannot be ruled out, the pattern hints at a potential market bottom, with traders eyeing possible rebounds or short squeezes to reverse the current bearish trend.