According to BlockBeats, data from Coinglass indicates that current funding rates in major centralized and decentralized exchanges suggest a bearish trend in the cryptocurrency market. The accompanying charts illustrate the funding rates for major cryptocurrencies.
Funding rates are fees set by cryptocurrency trading platforms to maintain a balance between contract prices and the prices of underlying assets, and they are typically applied to perpetual contracts. This mechanism facilitates the exchange of funds between traders taking long and short positions, without the platform collecting these fees. It aims to adjust the cost or profit of holding contracts, ensuring that contract prices remain close to the prices of the underlying assets.
The funding rate of 0.01% is considered the baseline rate. When the funding rate exceeds 0.01%, it indicates a general upward trend in the market. Conversely, when the funding rate falls below 0.005%, it reflects a prevailing downward trend in the market.
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