​Bitcoin and Ethereum Funding Rates Signal Continued Bullishness Despite Recent Selloff

Despite dropping spot prices in the previous 24 hours, funding rates in the market for bitcoin (BTC) and Ethereum (ETH) perpetual futures contracts show that most crypto derivatives traders remain positive.Crypto news Funding rates on the largest crypto exchange Binance's BTC/USDT perpetual contract have mostly stayed positive throughout July, despite stagnant and declining prices since July 19.

The same has mostly been true for the ETH/USDT perpetual contract. Even though ETH dropped drastically on Monday this week, plunging from USD 1,600 to far below the critical USD 1,500 barrier, the financing rate has remained positive.

A positive funding rate indicates that traders must pay a financing charge to those who are short, while a negative funding rate is the inverse. Continuous futures funding rates are usually positive during optimistic market circumstances and negative during bearish market situations.

Binance is often the leading exchange for an open interest in bitcoin's perpetual futures. Every 8 hours, the exchange adjusts its perpetual financing rates.

Meanwhile, selloffs of stretched bitcoin long positions totaled USD 30.6 million between midday and midnight UTC on Monday. The incident saw the most selloffs since July 20, when over USD 55 million in bitcoin longs were sold when bitcoin fell from the USD 24,000 level.

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