BlockBeats reported on Oct. 1 that funding rates across major centralized exchanges and decentralized exchanges continued to point to a bearish market, citing data from Coinglass, as Bitcoin weakened again. The report said the current readings across mainstream CEX and DEX venues still reflected a negative market bias, with the detailed rates shown in an accompanying chart.
BlockBeats also included a note explaining how funding rates work in crypto derivatives markets. Funding rates are typically used in perpetual futures to keep contract prices aligned with the underlying asset. The mechanism transfers payments between long and short traders, while the exchange itself does not collect the fee. According to the note, a 0.01% funding rate is treated as the baseline level. A rate above 0.01% generally signals a bullish market, while a rate below 0.005% is usually read as bearish.
Funding rates across major centralized exchanges and decentralized exchanges continued to signal a bearish market on Oct. 1 as Bitcoin weakened again, according to Coinglass data cited by BlockBeats. The outlet said the detailed funding rates were shown in an accompanying chart.
How BlockBeats described the funding-rate mechanism
BlockBeats noted that funding rates are set by crypto trading platforms to help keep perpetual contract prices aligned with the prices of the underlying assets. The mechanism usually applies to perpetual futures.
It described funding as a transfer of payments between long and short traders rather than a fee charged by the exchange. The purpose is to adjust the cost or return of holding contracts so that contract prices stay close to spot prices.
According to the note, a funding rate of 0.01% represents the baseline rate. A reading above 0.01% generally indicates a bullish market, while a reading below 0.005% points to a bearish one.
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