Bitcoin funding rates on Binance, the largest global cryptocurrency exchange by trading volume, have plummeted to their lowest levels of the year, signaling a significant shift in market sentiment.
Funding Rate Changes
According to CryptoQuant onchain analyst EgyHash, Bitcoin (BTC) funding rates on Binance have remained negative for three consecutive days. This bearish shift was last observed in October 2023 and indicates that short positions, bets that the BTC price will decline, have overtaken long positions. For some traders, this indicates a prevailing pessimism in the market.
Bearish Sentiment Building
An Aug. 16 report from 10x Research noted a lack of institutional interest in BTC. According to Markus Thielen, founder of 10x Research, stablecoin inflows are the key indicator, where fiat dollars are converted into cryptocurrencies and moved into BTC or Ether (ETH). Based on the seven-day minting ratio, institutional buyers are less active, further confirming the bearish market sentiment.
ETFs Turning Positive
On Aug. 15, spot BTC exchange-traded funds (ETFs) turned positive with $11.11 million inflows, despite declining interest in Grayscale Bitcoin Trust (GBTC). According to Sosovalue, the total net asset value of spot Bitcoin ETFs reached $51.99 billion after combined net inflows of $17.33 billion. This indicates an increasing demand from both institutional and retail investors for BTC as a viable digital asset.
The decline in Bitcoin funding rates on Binance signals significant shifts in market perception. While both institutional and retail investors continue to show interest in spot Bitcoin ETFs, the overall market sentiment remains rather bearish.
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