Bitcoin Funding Rates Plummet on Binance as Short Positions Dominate Market
Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...
Bitcoin funding rates on Binance, the world’s largest cryptocurrency exchange by trading volume, have dropped to their lowest levels of the year, reflecting a marked shift in market sentiment.
According to CryptoQuant on-chain analyst EgyHash, the funding rates for Bitcoin on Binance have been negative for three consecutive days, a trend last seen in October 2023.
The negative turn suggests that short positions—bets that the price of Bitcoin will fall—are now outpacing long positions, indicating growing bearishness among traders.
Funding rates on Binance have long been a barometer for market sentiment, reflecting the balance between short and long positions.
When funding rates become negative, it means traders holding short positions are required to pay those holding long positions, signaling higher demand for short positions.
EgyHash’s data reveals that the current funding rates have reached their most negative point of the year, underscoring the dominance of short positions in the perpetual futures market.
The broader market sentiment is also turning cautious, as reflected by the average Bitcoin funding rate across all exchanges, which has also turned negative.
A report from 10x Research on August 16 highlighted a lack of institutional interest in Bitcoin at current price levels.
The report pointed to the seven-day minting ratio, a key stablecoin metric that tracks Bitcoin buyer activity, as evidence that institutions are hesitant to engage with the market.
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