The Funding Rate for Binance Coin (BNB) has spiked to 0.013%.
BNB’s futures Open Interest (OI) has risen to $429.29 million.
Technical indicators, such as the Chaikin Money Flow (CMF) and Fibonacci Retracement, suggest that BNB may continue to move towards $600.
The Funding Rate, a key indicator of sentiment in the derivatives market, has recently experienced a notable spike for Binance Coin (BNB), suggesting a potential shift in market dynamics.
As a reflection of traders’ positions, the Funding Rate for BNB jumped to 0.013% on July 3, raising questions about the implications for the cryptocurrency’s price.
Investor Confidence in Binance Coin Grows
The Funding Rate serves as a balancing mechanism between long and short positions in the derivatives market. However, when anomalies like the recent spike in BNB’s Funding Rate occur, it indicates a shift in investors’ behavior, favoring one side over the other.
Source: Santiment
In essence, a highly positive Funding Rate coincides with increasing confidence in a coin’s potential price appreciation. Conversely, sporadic moves into negative territory imply bearish sentiment.
The rise in the Funding Rate suggests that the perpetual price is currently trading at a premium compared to the spot value. Although BNB’s price has decreased by 2.06% in the last 24 hours, the value has risen within the last hour.
If this pattern persists, it is reasonable to infer that the coin will continue its upward trajectory. Interestingly, the trend displayed by the Funding Rate mirrors that of the futures Open Interest (OI), which represents the value of outstanding contracts in the market.
From a trading perspective, a rise in the Open Interest could potentially support a price increase for BNB, as it has done in the past. However, it is crucial to consider the cryptocurrency’s potential from a technical standpoint as well.
Based on the daily chart, BNB may continue its upward movement towards the $600 mark.