Market Sentiment Turns Bearish as Funding Rates Decline

According to BlockBeats, data from Coinglass indicates that the funding rates on major centralized and decentralized exchanges are showing a clear bearish trend. 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 mechanism involves the exchange of funds between long and short traders, without the platform charging a fee, to adjust the cost or profit of holding contracts and keep contract prices close to the asset prices. A funding rate of 0.01% is considered the baseline. 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.