Analytics firm Glassnode has highlighted how Bitcoin Funding Rates have increased across exchanges, but still not by much.
Funding rates for Bitcoin Perps have skyrocketed
In a new after on X, Glassnode discussed the latest trend in Bitcoin Funding Rates for the major perpetual futures markets. The “Financing Rate” is an indicator that measures the amount of periodic fees that futures market traders exchange among themselves on a particular derivatives platform.
When the value of this measure is positive, it means that the long holders are paying a premium for the shorts to hold their position. Such a trend implies that a bullish mentality is dominant in the market.
On the other hand, the fact that the indicator is below zero indicates that the shorts outweigh the longs, and a bearish sentiment is shared by the majority of traders on the exchange.
Here is the chart shared by Glassnode showing the trend in the 7-day moving average (MA) of the Bitcoin Funding Rate for major exchanges over the past few years:
As shown in the chart above, the Bitcoin Funding Rate has witnessed a rise on these platforms lately, indicating that investors have taken new bullish positions.
The average funding rate for these exchanges fell to 0% in November as the cryptocurrency’s price crashed. As assets entered the consolidation phase, investors gradually built long positions, culminating in a recovery of the indicator to 0.005%.
However, over the past 24 hours, the average funding rate has fallen back to 0.003%, implying that some investors have closed their long positions after the latest recovery rally and/or others have set up shorts to bet against the bullish price action.
In the past, large rallies have often occurred alongside notable positive funding rates across the various exchanges. According to Glassnode, the threshold is generally 0.001%. With average funding levels still below this level, the analytics firm notes, “current conditions remain supportive but not yet decisive.”
BTC broke above $94,000 before heading back down
Bitcoin has recently seen a renewal of bullish momentum with the price recovering to $94,700, but the past day has seen a setback for the digital asset as it is now back at $92,100.
Other cryptocurrencies have also seen varying degrees of volatility over the past day, resulting in liquidations of more than $500 million on the derivatives exchanges, as data from MintGlass shows. Of these $503 million in liquidations, approximately $146 million of the affected positions were Bitcoin-related.
