"The dizziness! Some say it goes up and some goes down, which one is this?"
Cryptocurrency king Bitcoin (BTC) funding rates by market capitalization have started to return to normal levels after earlier price increases prompted many traders to pay higher fees than usual.
This is because traders want to maintain long positions in the last seven days, therefore they pay from 0.19% to 0.93% in BTC fees while the funding rates for Ethereum (ETH), Solana (SOL) and Ripple (XRP) also become normal.
In context, the financing rate is a periodic payment between short and long traders aimed at maintaining the asset futures contract price near its spot price.
While the futures contract is an agreement to buy or sell an asset at a price agreed in advance with a contract that does not have an expiration date.
So here it can be seen that the funding rate reflects the overall sentiment of traders and their projections for future crypto market trends.
Therefore, a negative funding rate signals traders to expect the crypto market to witness a decline, as does a positive funding rate that indicates traders are going long.
Please note that most traders are predicting BTC to stay lower for the foreseeable future, but some analysts believe that BTC will continue its upward trend despite the recent pullback.
At the time of writing, the price of BTC jumped by 1.14% to $43,539 in the last 24 hours with a market cap of $852 billion and recorded a 1.95% rise over the last week.
