What The Negative Bitcoin Funding Rates Say About Investor Outlook

Bitcoin funding rates have remained low even when the price of the digital asset has rebounded. The trend for the previous week showed that investors remained extremely wary of the market, and there has not been a change for the new week either. This coincides with the general market sentiment falling back deep into the fear territory. This report takes a look at where the bitcoin funding rates are currently and what it says about the market.

Funding Rates Remain Below Neutral

Back at the beginning of August, the bitcoin funding rates had finally recovered to neutral, speaking some hope in the market. However, this was only short-lived as the funding rates had declined below neutral the following week.

Since then, there has been no significant positive change in the funding rate. Rather, it has continued to plummet, with only a few slight recoveries here and there. The last week was no different in this regard, as funding rates dropped below 0% once more.

It was most prominent on the Binance crypto exchange, where funding rates had reached their lowest point in the last two months. The crypto exchange has also not seen any recovery to the neutral level in the last two weeks, marking one of the most bearish trends for the exchange.

Funding rates remain below neutral Source: BTCUSD on TradingView.com

It also goes to show the same for the crypto market in general. Perpetual traders favor short liquidations and, even then, continue to place conservative bets. And all of this is happening while open interest remains elevated. As such, perps continue to trade below the spot prices.

However, such a stretch of below-neutral funding rates is not always all bad for the digital asset. It is important to know that such trends set up a pretty good spot for a shot squeeze, but that is if there is a sharp climb in investor interest. For now, bitcoin investors are choosing to stay out of the market and placing very conservative bets at best.

Featured image from Coingape, charts from Arcane Research and TradingView.com

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Bitcoin funding rates have remained low even when the price of the digital asset has rebounded. The trend for the previous week showed that investors remained extremely wary of the market, and there has not been a change for the new week either. This coincides with the general market sentiment falling back deep into the fear territory. This report takes a look at where the bitcoin funding rates are currently and what it says about the market.

Funding Rates Remain Below Neutral

Back at the beginning of August, the bitcoin funding rates had finally recovered to neutral, speaking some hope in the market. However, this was only short-lived as the funding rates had declined below neutral the following week.

Related Reading: Crypto Market Sentiment Plunges To 1-Month Lows, What Lies Ahead?

Since then, there has been no significant positive change in the funding rate. Rather, it has continued to plummet, with only a few slight recoveries here and there. The last week was no different in this regard, as funding rates dropped below 0% once more.

It was most prominent on the Binance crypto exchange, where funding rates had reached their lowest point in the last two months. The crypto exchange has also not seen any recovery to the neutral level in the last two weeks, marking one of the most bearish trends for the exchange.

Funding rates remain below neutral