Bitcoin Funding Rate Turns Negative After $ 48K Retest: Was It A Bear Trap?
When (BTC) lost the $ 52,000 support on April 22, the funding rate of futures contracts entered negative territory. This rare situation causes shorts, investors who bet on the price drop, pay commissions every eight hours. While the rate itself is mildly damaging, this situation creates incentives for arbitration desks and market makers to buy perpetual contracts (reverse trades) and at the same time sell future monthly contracts. The cheaper it is for long-term leverage, the greater the incentives for bulls to open positions, creating a perfect “bear trap.” 8-hour funding rate of BTC margin perpetual futures. Source: BybtBitcoin 1-month OKEx futures annualized premium (base). Source: SkewBitcoin Call Option Contracts for June 25. Source: Deribit Continue reading on Coin Telegraph
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