On December 11th, CoinGlass data revealed that funding rates on major centralized and decentralized exchanges are predominantly bearish, affecting mainstream cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
This indicates a market-wide short bias, suggesting traders are positioning defensively, potentially signaling cautious sentiment in the cryptocurrency derivatives markets.
Bearish Funding Rates Across Major Crypto Exchanges
CoinGlass data highlights that major centralized exchanges (CEXs) and decentralized exchanges (DEXs) are displaying funding rates below the baseline neutral mark of 0.01%. This metric implies a net bearish sentiment, affecting prominent cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and key altcoins like Solana (SOL) and Binance Coin (BNB). Cryptocurrency exchanges use funding rates to maintain balance between a contract's value and the underlying asset price.
Major assets impacted include BTC, ETH, SOL, and BNB. Typical bearish sentiment is seen across BTC and ETH perpetual contracts, representing a market trend towards more defensive or short-biased strategies. Market participants are paying lower premiums to maintain long positions. Such indications of negative funding across major platforms suggest a broadly bearish outlook among traders, with implications for potential short squeezes if market momentum shifts.
"The global average funding rate stood at -0.006%, a sign that shorts are paying longs to keep their bearish bets open. Historically, this negative flip has actually marked seller exhaustion, aligning with local bottoms when sustained." - Glassnode, On-chain and derivatives analytics provider
Historical Context, Price Data, and Expert Insights
Historically, persistent negative funding rates have sometimes preceded a market bottom, signaling trader exhaustion. Short squeezes often follow if spot prices stabilize or rise, redressing the bearish sentiment.
Bitcoin (BTC), a key asset in the market, currently has a price of $90,274.93 and a market cap of about $1.80 trillion, according to CoinMarketCap. It dominates roughly 58.57% of the market. With a 24-hour trading volume of $70.39 billion, BTC's price is down 2.47% over the last 24 hours. The cryptocurrency has experienced a declining trend, with a 21.87% drop over 90 days, reflecting the broader bearish sentiment.
The Coincu research team suggests that negative funding rates across major platforms may continue to suggest bearish trends, particularly if funding remains below neutral for extended periods. Historical precedents show potential shifts in trader behavior when markets align with institutional flows, potentially offering insights into future market movements.