This analysis explores the behavior of perpetual futures markets across Binance, BitMEX, Bybit, HTX Global, and OKX during key market cycles in 2024.
Key Observations:
Price Upswings: Funding rates increased across all exchanges during Bitcoin’s rise from ~$50K to over $100K. Retail-focused platforms like Bybit and HTX Global exhibited sharp spikes, often exceeding 0.05%, driven by overleveraged long positions. This overextension frequently led to corrections and cascading liquidations. By contrast, Binance and BitMEX maintained more stable rates, reflecting institutional discipline and measured trading behavior.
Sideways Movements: During low-volatility periods (January–February and late October 2024), funding rates remained neutral across exchanges. Retail platforms saw subdued activity, while institutions likely used these phases to rebalance or accumulate positions strategically.
Downward Movements: In corrections seen in April, June, and September 2024, funding rates turned negative on OKX, Bybit, and Deribit, reflecting a dominance of short positions. Deribit showed particularly sharp declines, indicative of sophisticated hedging strategies. Binance’s near-neutral funding rates suggested institutional stability even during sell-offs.
Retail-dominated exchanges Bybit, HTX Global, and OKX continue to reflect the emotional behaviour of the retail trade with price spikes in rallies and corrections due to overleveraged positions. Additionally, elevated funding rates (>0.05%) often precede corrections.
We can assume Binance and BitMEX are institutional-focused platforms due to stable funding rates, reflecting the institutions' measured participation and indicating substantial market efficiencies.
Alternatively, Deribit, an options market, consistently reflected marketing risk on/off marketing sentiment, indicating a more sophisticated investor or a trader utilising hedging strategies.
Written by ShivenMoodley
