Demand for short positions in the bitcoin futures market is increasing, tilting short-term investor sentiment back toward caution.

On April 30, local time, Cointelegraph reported that bitcoin faced resistance near $77,800 on April 29 and has been fluctuating around $76,000.

The move came as weakness across risk assets coincided. The S&P 500 index also failed to gain traction near 7,200. With the Iran war entering its 60th day and international oil prices rising toward $118, inflation concerns resurfaced. Worries that technology companies' returns on artificial intelligence investment may fall short of expectations were also cited as a factor adding to market unease.

Derivatives indicators made the mood clearer. The funding rate for bitcoin perpetual futures turned negative again on April 29. It had been in a neutral to slightly bullish zone until the previous day, but the balance shifted toward selling. When the market is in a healthy bullish trend, the annualised funding rate typically holds around 6 to 12 percent, with long-position holders paying the cost. A move into negative territory is read as a sign that demand for short positions has increased.

In fact, over the past 2 weeks the funding rate has mostly remained in negative territory. That indicates continuing demand for leveraged bets on a decline.

Still, it is difficult to say large investors have uniformly turned bearish. The long-short ratio of top traders on exchanges was tallied at 0.80 on Binance on April 29. That was a slight improvement from 0.75 on April 28, but it still leans slightly toward bearishness. On crypto exchange OKX, top traders have intermittently shown bullish signals since April 25, but the moves did not last long.

Even so, signs that large investors' positions are deteriorating rapidly were limited. The long-short ratio of top traders has generally remained stable over the past week. That means there was little change in large investors' positions even as bitcoin slid to $75,000 on April 29. Caution persists across the futures market, but whale positions have not shifted bearish at the same pace.

The market is not equating weaker conviction among bullish investors with an immediate shift into a bear market. Bitcoin has not been able to settle above $78,000, but there is also no clear evidence yet that large investors have tilted aggressively toward shorts. Still, as futures funding rates remain negative, bitcoin investor sentiment is likely to react more sensitively for the time being to macroeconomic trends and technology companies' earnings.