Bitcoin briefly slips below $65,000… funding rates at major exchanges turn weaker
Summary
- Bitcoin briefly fell below $65,000, with derivatives-market sentiment reported to be tilting bearish.
- Funding rates across major CEXs and DEXs broadly declined, with the market said to have returned to a full-fledged bearish phase.
- The drop in funding rates was described as a near-term signal of increased short positioning, while an excessively negative funding rate could raise the likelihood of a short squeeze.
As Bitcoin (BTC) briefly dipped below the $65,000 level during the session, sentiment in the derivatives market is again tilting bearish.
According to BlockBeats, a media outlet specializing in virtual assets (crypto), when Bitcoin briefly slid under $65,000 on the 23rd, CoinGlass data showed that funding rates across major centralized exchanges (CEX) and decentralized exchanges (DEX) generally declined, sending the market back into a broad-based bearish phase.
Funding rates are costs set to correct the gap between perpetual futures contract prices and spot prices. They are exchanged periodically between holders of long (buy) and short (sell) positions, and are not fees collected by exchanges but a mechanism to adjust position-holding costs. This helps keep contract prices close to the underlying asset price.
This decline in funding rates is interpreted as a signal that short positioning is increasing in the near term. However, if negative funding rates become excessively steep, the likelihood of a short-term spike driven by short-covering liquidations—so-called short squeezes—could also rise, warranting caution in the market.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
