Crypto Market Sentiment Turns Bearish as Funding Rates Decline

According to BlockBeats, data from Coinglass indicates that the funding rates on major centralized and decentralized exchanges (CEX and DEX) reveal a growing bearish sentiment among market participants towards altcoins following a recent market downturn. Bitcoin's funding rate has also shifted from neutral to bearish. Funding rates are fees set by cryptocurrency trading platforms to maintain a balance between contract prices and the prices of underlying assets, typically applied to perpetual contracts. This mechanism facilitates the exchange of funds between long and short traders, without the platform charging this fee, to adjust the cost or profit of holding contracts and keep contract prices aligned with asset prices. A funding rate of 0.01% is considered the baseline. When the rate exceeds 0.01%, it indicates a bullish market sentiment, while a rate below 0.005% suggests a bearish outlook.