The funding rate for perpetual futures often acts as a proxy for market sentiment, revealing the balance between long and short positions. Anomalies in these rates can indicate significant imbalances, providing hints about potential market moves. Over May, the funding rates for USDT and USD-margined perpetual futures were stable, reflecting Bitcoin's tranquil trading. Surprisingly, on May 27, a sudden spike in the funding rate on dYdX signaled... the reasons behind this deviation and the potential elbow-room it created for opportunistic traders reveal a fascinating shift. But what exactly caused this abrupt change?
Funding rate volatility shows localized trading imbalances despite market stability Funding rate volatility shows localized trading imbalances despite market stability
Market stability is disguised by brief funding rate spikes and drops across exchanges.
3 min read
Updated: Jun. 4, 2024 at 5:29 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
BitMEX
HDR Global Trading Limited owns and operates BitMEX which is a trading platform that offers investors access to the global financial markets using only Bitcoin.