Market Sentiment Turns Bearish as Funding Rates Shift

According to BlockBeats, data from Coinglass indicates that the funding rates on major centralized and decentralized exchanges have shifted, signaling a bearish market sentiment. The funding rates for key cryptocurrencies are detailed in the accompanying chart. Funding rates are fees set by cryptocurrency trading platforms to maintain the balance between contract prices and the prices of the underlying assets, typically applied to perpetual contracts. This mechanism facilitates the exchange of funds between long and short traders, without the trading platform collecting these fees. The purpose is to adjust the cost or profit of holding contracts, ensuring that contract prices remain close to the underlying asset prices. A funding rate of 0.01% is considered the baseline rate. When the funding rate exceeds 0.01%, it indicates a generally bullish market sentiment. Conversely, when the funding rate falls below 0.005%, it suggests a bearish market outlook.