Market Sentiment Turns Bearish as Funding Rates Decline

According to BlockBeats, recent data from Coinglass indicates a growing bearish sentiment in the cryptocurrency market. Following a further decline last night, the number of trading pairs with negative funding rates has increased compared to the previous day. 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 yield of holding contracts, ensuring contract prices remain close to asset prices. A funding rate of 0.01% is considered the benchmark rate. Rates above 0.01% suggest a bullish market sentiment, while rates below 0.005% indicate a bearish outlook.