What is the impact of the bitcoin futures perpetual funding rate on cryptocurrency prices?

3 answers

• Nov 28, 2021 · 3 years ago
  The bitcoin futures perpetual funding rate can have a significant impact on cryptocurrency prices. When the funding rate is positive, it means that long positions pay funding to short positions. This incentivizes traders to take short positions, which can lead to a decrease in the price of cryptocurrencies. Conversely, when the funding rate is negative, it means that short positions pay funding to long positions. This incentivizes traders to take long positions, which can lead to an increase in the price of cryptocurrencies. Therefore, monitoring the bitcoin futures perpetual funding rate is important for understanding potential price movements in the cryptocurrency market.
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• Nov 28, 2021 · 3 years ago
  The impact of the bitcoin futures perpetual funding rate on cryptocurrency prices is not always straightforward. While a positive funding rate may indicate bearish sentiment and potentially lead to a decrease in prices, it could also attract short-term traders looking to profit from the funding payments. On the other hand, a negative funding rate may indicate bullish sentiment and potentially lead to an increase in prices, but it could also discourage short-term traders from taking long positions. Overall, the relationship between the funding rate and cryptocurrency prices is complex and influenced by various factors.
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• Nov 28, 2021 · 3 years ago
  According to research and analysis conducted by BYDFi, the bitcoin futures perpetual funding rate has been found to have a statistically significant impact on cryptocurrency prices. Their study shows that when the funding rate is positive, there is a higher probability of a price decrease in the following days. Conversely, when the funding rate is negative, there is a higher probability of a price increase. This information can be valuable for traders and investors in making informed decisions based on the funding rate trends.
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