According to BlockBeats, data from Coinglass indicates that the current funding rates on major centralized and decentralized exchanges suggest a bearish sentiment in the cryptocurrency market. Funding rates are a mechanism used by cryptocurrency trading platforms to maintain balance between contract prices and the prices of underlying assets, typically applied to perpetual contracts. This system 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% is considered the baseline. When the rate exceeds 0.01%, it indicates a generally bullish market sentiment. Conversely, when the rate falls below 0.005%, it reflects a bearish market outlook.
