{"id":495826,"date":"2022-07-15T23:00:46","date_gmt":"2022-07-15T23:00:46","guid":{"rendered":"https:\/\/wncen.com\/?p=495826"},"modified":"2024-06-11T14:21:37","modified_gmt":"2024-06-11T14:21:37","slug":"bitcoin-marks-one-month-of-negative-funding-rates-more-decline-incoming","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/bitcoin-marks-one-month-of-negative-funding-rates-more-decline-incoming\/","title":{"rendered":"Bitcoin Marks One Month Of Negative Funding Rates, More Decline Incoming?"},"content":{"rendered":"
Bitcoin funding rates had first fallen below the neutral level last month. Before that, the funding rates had been fluctuating at and below neutral for the longest time. This new trend has lasted longer than expected as the digital asset\u2019s price continues to struggle. In this report, we take a look at the state of bitcoin funding rates as well as the implications if the present trend continues.<\/p>\n
When bitcoin funding rates had first fallen below neutral in June, the price of the digital asset was still trading well above $30,000. Since then though, multiple crashes and dips have seen the cryptocurrency lose more than $10,000 of its value and continue to struggle to hold above its previous cycle peak.<\/p>\n
Related Reading |\u00a0Mid Cap Crypto Coins Lead In July, Best Way To Weather The Winter?<\/a><\/strong><\/em><\/p>\n However, despite the minor upward corrections that have been recorded since then, the funding rates have refused to budge. At the time of this writing, the funding rates have now spent a complete month with below neutral numbers.<\/p>\n Binance and Bybit are some of the most prominent platforms when it comes to calculating funding rates and the last time the crypto exchanges had seen funding rates in the neutral level since bitcoin\u2019s fall from $30,000 had been in mid-June. Instead, the funding rates have begun to mirror the movement of price and have not recovered since then.\u00a0<\/span><\/p>\n <\/p>\n This comes despite a surge in the bitcoin open interest last week which reached a new all-time high. So the funding rates have deviated from the open interest and are now following the low yield rates that are being recorded in the market.\u00a0<\/span><\/p>\n With bitcoin\u2019s price above $20,000 once more, there has been some positive sentiment returning to the market. However, it remains shaky given that there is not a lot of support left at this point and the price can easily be pulled down by the bears.<\/p>\n This is why the decline in the bitcoin funding rates remains a concern. Naturally, the funding rates are expected to see an increase when the price of the digital asset has declined as much as it has. But the opposite has been the case so far, meaning that there is not a lot of new money coming into the space, if any.<\/p>\n <\/p>\n For a prominent recovery in bitcoin\u2019s price, an uptick in funding rates would need to be seen. When sentiment picks up among perp traders, the broader market is sure to follow.\u00a0<\/span><\/p>\nFunding rates remain below neutral | Source: Arcane Research<\/a><\/pre>\n
Will Bitcoin Recover?<\/h2>\n
BTC recovers just below $21,000 | Source: BTCUSD on TradingView.com<\/a><\/pre>\n