Crypto Market Shows Bearish Trend as Funding Rates Decline

According to BlockBeats, data from Coinglass indicates that the funding rates on major centralized and decentralized exchanges are reflecting a generally bearish sentiment in the cryptocurrency market. Funding rates are a mechanism used by cryptocurrency trading platforms to maintain the balance between contract prices and the prices of the underlying assets, typically applied to perpetual contracts. This system 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 that 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 outlook.