The #Bitcoin futures basis rate measures the difference between the price of Bitcoin futures contracts and the spot price. In a healthy market, this premium should range between 5%โ10% annually ๐
When the basis rate drops, it signals weakening confidence in the market, as traders are less willing to pay a premium for futures contracts.
๐ Yesterday, the basis rate fell below 4%, indicating bearish sentiment. This suggests that traders are becoming more cautious and may be pulling back on leveraged long positions.
The last time the basis rate dropped this significantly, Bitcoinโs price plummeted by over 24% within days. While history doesnโt always repeat itself, this shift is a warning sign for traders to watch closely ๐
