Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Bitcoin perpetual futures reflect market pessimism as funding rates stay below neutral: K33 Research

Bitcoin perpetual futures reflect market pessimism as funding rates stay below neutral: K33 Research

The BlockThe Block2024/09/04 11:34
By:Brian McGleenon

Bitcoin perpetual futures funding rates have remained below neutral for an extended period, indicating market pessimism.However, an analyst suggests there is room for a rebound as sell-side exhaustion looms and seasonal trends play out.

The bitcoin perpetual futures market is showing considerable pessimism, with funding rates remaining below neutral for an extended period — similar to the significant price drop the digital asset experienced in November 2022 — according to an analyst.

"We’re in the deepest funding rate environment since bitcoin’s 80% drawdown in November 2022," K33 Research analyst Vetle Lunde said. However, Lunde added that these hedges or direct short-biased bets are getting crowded, and that "this is a solid indicator of nearing sell-side exhaustion."

In this week's K33 Research report, Lunde pointed out that the funding rate for bitcoin perpetual futures has been below neutral for more than 30 days in a row — marking the longest stretch since a similar 36-day period back in May 2024. The K33 Research analyst added that while the May 2024 period saw negative funding rates for a longer time, the current rates are even lower and have remained consistently below neutral for the past month.

"While the May streak lasted longer, annualized funding rates during that period averaged at 5.1%, substantially higher than the current regime, the average four-week funding rates now sit at negative levels for the first time since December 25, 2022," Lunde said. When the bitcoin perpetual futures funding rate is negative, it means traders are mostly betting on the price of the asset going down.

However, the K33 Research analyst noted that if the market follows seasonal trends, September offers opportunities to buy a dip before a possible recovery in the fourth quarter of the year. "Buying blood in September to build exposure for Q4 has historically been the best spot strategy," Lunde added.

The  price of bitcoin increased by over 4% in the past 24 hours to trade at $56,462 at 7:09 a.m. ET. Bitcoin BTC -4.20% dominance is at 53.9%, and ether dominance is at 13.9%, according to CoinGecko data .


0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!