BlockBeats reported on July 22, citing Coinglass data, that funding rates across major centralized and decentralized exchanges are showing a weaker bearish bias as Bitcoin continues to strengthen. The report points to current funding-rate readings as a sign that negative market positioning is fading, with the detailed rates shown in the accompanying chart.
BlockBeats also outlined how funding rates work in crypto derivatives markets. The mechanism is commonly used in perpetual futures to keep contract prices close to the underlying asset. Payments are exchanged directly between long and short traders, while the trading platform does not collect the fee. In the explanation included in the report, a 0.01% funding rate is treated as the baseline. Readings above 0.01% generally indicate a bullish market bias, while rates below 0.005% are described as a sign of broadly bearish sentiment.
Funding rates across major centralized exchanges and decentralized exchanges are showing that bearish market sentiment is easing as Bitcoin continues to gain strength, according to Coinglass data cited by BlockBeats on July 22. The specific funding-rate readings were provided in the accompanying chart.
What the funding rate measures
BlockBeats said the funding rate is a mechanism used by crypto trading platforms to keep perpetual contract prices aligned with the price of the underlying asset.
It works as a transfer of funds between long and short traders, and the platform itself does not collect the payment. The mechanism changes the cost or return of holding a contract so that the contract price stays close to the underlying asset.
Reference levels cited in the report
According to the explanation included in the report, a funding rate of 0.01% is considered the baseline. A rate above 0.01% generally points to a bullish market bias, while a rate below 0.005% indicates that the market is broadly bearish.
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