Bitcoin Financing Rates Are Unchanged Despite a Drop to $30,000

　　Bitcoin funding rates had plummeted at the start of May. While there was no definite bear trend at the time, the price of Bitcoin was already displaying indications of weakness. Because of this weakening, the digital asset has now fallen below $30,000 for the first time in 2022, only to rise again. However, funding rates that had reverted to neutral had been unaffected by market volatility.

　　Bitcoin Funding Rates Remain Stable

　　Bitcoin had experienced enormous sell-offs around the $35,000 mark. This was mostly caused by investors fearing that they would lose more of their holdings and, as a result, attempting to depart the coin to limit these losses. The ensuing fear and liquidations pushed the price of the digital asset even lower, and everything else in the market had followed suit like clockwork.

　　Funding rates would turn out to be one of the rare exceptions to this downward trend. After rebounding from its crash at the beginning of the month, it returned to the neutral level, where it remained even when bitcoin fell below $35,000. Even when its price had dropped, funding rates had remained stable.

　　This is consistent with the trend that has been observed after the December 4th catastrophe. Funding rates began on a pattern of being at or below neutral and have remained consistent since then. It was clearly the outcome of bad investor sentiment, which had resulted in low momentum.

　　The perp dealers are another group that this is symptomatic of. These continuous traders have been paying close attention to the spot market. This is definitely out of the ordinary since, as prior market patterns have shown, funding rates decline when the price of the digital asset falls.

　　This suggests that these perp traders are inclined toward increasing their long exposure to the digital asset. Most of this is taking place towards the bottom of the one-and-a-half-year trading range.

　　The average financing rate is derived from the cryptocurrency exchanges Binance and Bybit, both of which have demonstrated the greatest presence among perp traders. Despite the entire Terra UST situation, funding rates have refused to move.

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