Crypto Market Shows Bearish Sentiment After Recent Correction

According to BlockBeats, data from Coinglass on January 17 indicates that after a recent two-day correction, the funding rates on major centralized and decentralized exchanges suggest a shift towards bearish sentiment in the crypto market. The negative outlook is particularly pronounced for altcoins. BlockBeats notes that 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 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% signifies a baseline rate. When the rate exceeds 0.01%, it indicates a generally bullish market sentiment. Conversely, a rate below 0.005% reflects a bearish market sentiment.