On February 8th, according to Coinglass data, Bitcoin rebounded above $70,000, but funding rate data shows the market remains broadly bearish. Several trading platforms have negative BTC funding rates, indicating short sellers are paying fees to long positions to maintain their holdings. Most trading platforms have positive ETH funding rates, but these are below the 0.005% threshold, suggesting a better bearish sentiment than for BTC.
BlockBeats Note: Funding rates are fees set by cryptocurrency trading platforms to maintain a balance between contract prices and the price of the underlying asset, typically applicable to perpetual contracts. It is a mechanism for exchanging funds between long and short traders; the trading platform does not charge this fee. It is used to adjust the cost or profit of traders holding contracts to keep the contract price close to the price of the underlying asset.
A funding rate of 0.01% represents the benchmark rate. A funding rate greater than 0.01% indicates a generally bullish market sentiment. A funding rate less than 0.005% indicates a generally bearish market sentiment.
