Binance's funding rate turned negative. On the back of pessimistic market sentiment, what does this mean exactly for BNB traders...
Growing bearish market sentiment means lower demand for BNB’s long positionshave turned negative again. Here, a negative trend in funding rates on Binance usually leads to considerable market movements.“Binance Funding Rates Trending Negative. Since 2023, this marks the third time the FR has entered negative territory for an extended period.”According to Nino, a Cryptoquant analyst, the historical data shows the current market condition has resulted in renewed attention.
When there are positive funding rates, long position holders pay short positions. This suggests a bullish market sentiment with investors willing to pay a premium to hold their positions. Conversely, a negative funding rate indicates that short position holders are paying long positions. This usually suggests a market correction or bearish market sentiment.Additionally, the aforementioned analysis claimed that since 2023, this is the third time Binance’s funding rate has turned negative.
However, one of the prevalent issues that has come into light over the past few days is Binance’s association with governments. Two days ago, Binance was accused of freezing accounts belonging to Palestinians on Israel’s request. According to“Imagine how many Muslims use Binance. They probably took their funds off because Israel was allowed to freeze gazan accounts.”
. Reduced demand for funding rate implies that investors lack confidence in the asset’s direction. As shown on the price charts, BNB has fallen over the past 30 days.
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