In the volatile world of cryptocurrency, perpetual futures are a go-to for many traders. These contracts don't expire, relying instead on a mechanism called the funding rate to balance market forces. Recently, Bitcoin's perpetual futures saw a dramatic shift. Typically steadied by consistent positive funding rates, a sudden plunge into negative territory coincided with geopolitical turmoil and a significant drop in Bitcoin's price. This shift in funding rates not only shows a rare bearish sentiment but leads us to wonder, what does this mean for the future of Bitcoin trading dynamics? Could this signal a more profound change in market sentiment?
Funding rate turns negative as Bitcoin drops below $64k Funding rate turns negative as Bitcoin drops below $64k
Negative funding rates signal bearish sentiment as Bitcoin struggles, reflecting traders' expectations of further price declines.
2 min read
Updated: Apr. 16, 2024 at 9:17 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.