Market sentiment remains negative as funding rates indicate a downward trend
According to BlockBeats, data from Coinglass reveals that current funding rates across major centralized and decentralized exchanges indicate a continuation of negative market sentiment. Funding rates for major cryptocurrencies are detailed in the accompanying chart.
Funding rates are a mechanism used by cryptocurrency trading platforms to maintain balance between contract prices and underlying asset prices, and are typically applied to perpetual contracts. These rates facilitate the exchange of funds between long and short traders, without imposing fees by the trading platform. They aim to adjust the cost or profit of holding contracts, ensuring that contract prices stay close to asset prices.
A funding rate of 0.01% indicates a baseline rate. When the funding rate exceeds 0.01%, it indicates an overall bullish sentiment in the market. Conversely, a funding rate below 0.005% indicates a bearish outlook in the market.
