Market Sentiment Turns Bearish as Funding Rates Indicate Downtrend

According to BlockBeats, data from Coinglass reveals that current funding rates on major centralized and decentralized exchanges suggest a bearish market sentiment. The funding rates for key cryptocurrencies are detailed in the accompanying chart. Funding rates are fees set by cryptocurrency trading platforms to maintain balance between contract prices and the prices of underlying assets, typically applied to perpetual contracts. This mechanism facilitates the exchange of funds between long and short traders, without the trading platform charging this fee. It serves to adjust the cost or profit of holding contracts, ensuring that contract prices remain close to the asset prices. A funding rate of 0.01% indicates a baseline rate. When the funding rate exceeds 0.01%, it signifies a bullish market sentiment. Conversely, a funding rate below 0.005% indicates a bearish market sentiment.