Crypto Market Shows Bearish Trend As Funding Rates Indicate

According to BlockBeats, data from Coinglass on March 12 reveals that the funding rates on major centralized and decentralized exchanges (CEX and DEX) indicate a bearish trend in the cryptocurrency market. The funding rates for major cryptocurrencies are detailed in the accompanying chart. BlockBeats explains that funding rates are fees set by cryptocurrency trading platforms to maintain a balance between contract prices and the prices of the 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, to adjust the cost or profit of holding contracts, ensuring that contract prices remain close to the underlying asset prices. A funding rate of 0.01% is considered the benchmark rate. When the funding rate exceeds 0.01%, it indicates a generally bullish market sentiment. Conversely, when the funding rate falls below 0.005%, it suggests a bearish market sentiment.