The latest statistics indicate a noteworthy trend in the funding rates of Binance as they have turned negative once again. A CryptoQuant analyst has disclosed that such a negative trend in the funding rates on Binance often leads to substantial market movements.
Binance Funding Rates Trending Negative“Since 2023, this marks the third time the FR has entered negative territory for an extended period.” – By @nino_tradeLink https://t.co/kyyqWNdreL pic.twitter.com/NDo4GvPwm6
— CryptoQuant.com (@cryptoquant_com) August 29, 2024
Negative Funding Rates of Binance Get Significant Attention, Signifying a Looming Big Market Event
The analyst pointed out that the historical data suggests that the present behavior has witnessed renewed attention. In this respect, it could pave the way for a likely big market event. Funding rates operate as periodic payments for short or long traders. They are reportedly based on the difference existing between the spot and perpetual contract prices.
If the funding rate shows a positive outlook, short positions get payment from long positions, denoting a bullish sentiment. On the other hand, an adverse funding rate indicates the payment from short to long positions. This often points toward a market correction or a bearish sentiment. Since last year, this is the 3rd time that the funding rates of Binance have turned negative.
Traders Potentially Expect a Downturn
The respective repeating pattern could signal an expected downturn for traders. Otherwise, it could also signify that the traders are at least hedging against likely downside risks. The current negative funding rates on Binance may highlight that additional traders believe in price dips. According to the CryptoQuant analyst, this could reportedly result in heightened volatility.
