BTC Perpetual Futures Funding Rate Signals Pessimistic Market Outlook
CryptoNewsTerminal Staff04 Sep, 2024
BTC Perpetual Futures Funding Rate Signals Pessimistic Market Outlook
The funding rate for Bitcoin perpetual futures has remained below neutral for an extended period, indicating a persistent pessimistic outlook in the market. According to a report by crypto research firm K33 Research, this is the first time since November 2022 that the funding rate has stayed below neutral for such a long duration. The report suggests that while short positions are currently dominant, selling pressure is approaching exhaustion. A negative funding rate implies that traders who are shorting Bitcoin (i.e., betting on its price to fall) are paying a premium to those who are holding long positions (i.e., betting on its price to rise). This indicates that there is more demand to bet against Bitcoin than to bet on its rise. The extended period of negative funding rates suggests that the market remains cautious and bearish on the long-term prospects of Bitcoin. However, the approaching exhaustion of selling pressure could indicate a potential reversal in sentiment in the future.
