According to BlockBeats, data from Coinglass on January 10 indicates that after recent fluctuations in the crypto market, funding rates on major centralized exchanges (CEX) and decentralized exchanges (DEX) suggest a neutral sentiment towards Bitcoin (BTC) and Ethereum (ETH). The funding rates on mainstream platforms have returned to neutral, although altcoins continue to experience significant negative rates.
BlockBeats notes that funding rates are set by cryptocurrency trading platforms to maintain balance between contract prices and the prices of underlying assets, typically applied to perpetual contracts. This mechanism involves the exchange of funds between long and short traders, and the platform does not charge this fee. It is used to adjust the cost or profit of holding contracts, ensuring that contract prices remain close to the asset prices.
A funding rate of 0.01% indicates a baseline rate. When the funding rate exceeds 0.01%, it reflects a generally bullish market sentiment. Conversely, a rate below 0.005% suggests a bearish outlook.
