Despite Bitcoin’s recent price decline, cryptocurrency analytics firm Alphractal reports that the aggregated funding rate across 11 major exchanges remains positive. This indicates a prevailing bullish sentiment among traders, with more betting on price increases (long positions) than decreases (short positions).
Funding rates, charged every eight hours, represent payments between long and short position holders. A positive funding rate means longs are paying shorts to maintain their positions, suggesting an expectation of further price appreciation. Conversely, a negative rate indicates shorts are paying longs, reflecting a bearish outlook.
Alphractal’s analysis reveals a divergence in sentiment across exchanges. While most platforms maintain positive funding rates, BitMEX (XBTUSD) and OKX (BTC-USD-SWAP) currently show negative rates. Bitfinex (BTC-USDT) stands out with the highest positive funding rate. This disparity highlights varying trading strategies and market interpretations among participants on different exchanges.
The report notes that persistently positive funding rates could signal excessive optimism and increase the risk of liquidations should Bitcoin experience further declines. A widespread shift to negative funding rates, however, could indicate a broader bearish trend with dominant short positions.
For now, the overall positive aggregated funding rate suggests that the market, despite the recent price drop, hasn’t turned broadly bearish. The continuing dominance of long positions, according to Alphractal, indicates a persistent belief in Bitcoin’s potential for future price appreciation. However, the firm cautions that monitoring funding rates across different exchanges remains crucial for understanding evolving market sentiment and potential risks.
