I've been analyzing the latest data from Coinglass, and it's pointing to a shift in market sentiment. Currently, the funding rates across major centralized and decentralized crypto exchanges are indicating a bearish outlook.
For those unfamiliar, funding rates are a crucial mechanism in perpetual contracts—they essentially dictate payments between long and short traders to keep contract prices aligned with the underlying asset. A rate below 0.005% is typically considered a bearish signal, and that's precisely what we're seeing.
This trend suggests that a majority of traders are now positioned for price declines, or at least are paying a premium to maintain their short positions. It's a key indicator I always watch to gauge market sentiment beyond just price action.