Bitcoin Perpetual Funding Rate Turns Negative: Will Bears Strike Gold?

• Bitcoin’s perpetual funding rate has turned negative for the third time in this year.
• Every time the funding rate goes negative, there is an increase in short liquidations and a rise in BTC price.
• This could potentially be a third time luck charm for bears if they are able to capitalize on the situation.

Perpetual Funding Rate for Bitcoin

The average funding rate (in %) set by exchanges for perpetual futures contracts was recently seen turning negative for the third time this year. This means that when the rate is positive, long positions periodically pay short positions and vice-versa when it is negative; short positions periodically pay long positions.

Previous Occurrences

Previously in January and February, the funding rates went through a short and sharp dip which lasted slightly longer in January than February. Both times saw an increase in short liquidations and an upward surge in Bitcoin price.

Will Third Time Be A Charm?

This brings us to the present scenario where investors‘ hopes are pinned on this being their third lucky charm and them being able to capitalize on it better than before. If they are successful, then we can expect another surge in BTC price with a concomitant rise in short liquidations as well. We will have to wait and watch how things unfold over the next few days or weeks to know this result eventually.

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Bitcoin’s perpetual funding rate has been seen turning negative for three times this year now; each of which saw an increase in short liquidations alongwith an upward surge of BTC price thereby making it possible for bears to capitalize upon it each time around but with varying success rates yet again proving that no one knows what fate holds ahead until you experience it first-hand!