Market Sentiment Turns Bearish as Funding Rates Shift

According to BlockBeats, data from Coinglass indicates that the funding rates on major centralized and decentralized exchanges are showing a bearish market sentiment. Funding rates are a mechanism used by cryptocurrency trading platforms to maintain balance between contract prices and the prices of underlying assets, typically applied to perpetual contracts. This rate facilitates the exchange of funds between long and short traders, without the trading platform charging a fee, to adjust the cost or profit of holding contracts, ensuring contract prices remain close to the asset prices. A funding rate of 0.01% is considered the benchmark rate. When the funding rate exceeds 0.01%, it suggests a bullish market sentiment. Conversely, when the funding rate falls below 0.005%, it indicates a bearish market sentiment.