Cryptocurrency analytics firm Alphractal has released its latest assessment of Bitcoin, noting that the aggregate funding rate across 11 major exchanges remains positive despite the recent BTC price drop.
According to Alphractal, the average funding rate shows that more traders are going long than short. This means that short positions receive compensation, while long positions pay funding fees that are charged every eight hours.
Currently, only BitMEX (XBTUSD) and OKX (BTC-USD-SWAP) are showing negative funding rates, while Bitfinex (BTC-USDT) has the highest positive rate.
Alphractal outlined two potential scenarios based on funding rate trends:
- If the funding rate remains positive, it could signal over-optimism and increase the risk of liquidation if Bitcoin declines further.
- If funding rates turn negative across all exchanges, it could signal a transition to a bear market dominated by short traders.
Despite Bitcoin’s recent decline, the overall funding rate is still above zero, suggesting the market has not yet turned completely bearish. However, Alphractal warns that investors should keep a close eye on funding rates, as sudden changes could signal changing market sentiment.
*This is not investment advice.
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