Leading Exchanges See Negative Funding Rates, Are Bears Taking Over?

Leading exchanges see negative funding rates with the price declining on crypto markets and it came to a lot of doubt on the part of investors so are the bears taking over? Let’s find out in our cryptocurrency news.

One of these has been the funding rates which remained flat for the better part of the first half of 2022 but there was some movement in the funding rates and it was not for the better. Two leading exchanges have seen some negative crypto funding rates for the past week and Binance and byBit appear on the top of the list of exchanges with the most trading volume becoming natural homes for traders. This Is why changes on these platforms can be huge to market movements.

📊 Daily On-Chain Exchange Flow#Bitcoin $BTC
➡️ $872.0M in
⬅️ $901.6M out
📉 Net flow: -$29.7M#Ethereum $ETH
➡️ $261.0M in
⬅️ $211.2M out
📈 Net flow: +$49.8M#Tether (ERC20) $USDT
➡️ $221.3M in
⬅️ $207.1M out
📈 Net flow: +$14.2Mhttps://t.co/dk2HbGwhVw

— glassnode alerts (@glassnodealerts) July 1, 2022

The funding rates were fluctuating at and below neutral for the biggest part of the month but the latter looks to have won out. After BTC Dropped below $20,000 a week ago, expectations were that most traders will want to get in given the low prices but it went the other way as the average funding rates are in the negative. ByBit and binance recorded an average funding rate of -0.0015 for the past week so a huge drop from the neutral 0.01% average aggregated funding rates.

This shows us that the bearish sentiment among the perp traders was growing and as such, they were leaning toward short traders. It came hot on the heels of pen interest reaching a new high and most of them came from both ByBit and Binance with these metrics showing that the short traders are more active compared to their long counterparts. Crypto traders are not the only ones that are bearish on the market. The same is with the space where investors chose to hold their cards closer to the chest than they often would.

The Fear and Greed index put the marekt sentiment in extreme fear territory for a few days which emans that the market closed out two consecutive months with the extreme fear sentiment. This is apparent with the exchange inflows and outflows declining in the past few days. The ratio of inflows to outflows shows investors are refusing to take risks in the market. BTC’s net flows came out to -$19.7 million after the outflows hit $901 million for the past day. Tether inflows remain muted as investors are less money into the exchange to buy tokens. With the positive net flow came out to $14.2 million for the past day and the sell-offs continued and threatened to drag the market lower.