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People who trade Bitcoin could make a lot of money as the funding rates have gone up to 100%.

  • The Bitcoin funding rates are really important in the crypto market. They affect how people trade and the way the market works.
  • According to Velo Data and CoinGlass, the amount of money being put into bitcoin futures on Binance has gone over 100% for the first time in at least a year.
  • A positive funding rate means that people who own perpetuals have to pay extra money to people who own short contracts.

The cost of borrowing Bitcoin has recently gone up a lot on platforms like Binance. This is used in markets where people make bets about the price of Bitcoin in the future. This sudden increase gives smart traders a big chance to make money by using different trading strategies.

If the funding rate is higher than 100%, it means that there is a lot of demand for buying compared to selling in perpetual futures contracts. When the market changes, it can be a sign that prices might go up or down. This makes traders change how they do things.

What are Bitcoin funding rates, and how do they operate

Bitcoin funding rates are regular payments given to traders who bet on the price of Bitcoin in future contracts. These payments are based on the difference between the contract’s price and the actual price of Bitcoin. Basically, they keep prices steady between the futures and spot markets.

The exchange decides how much funding is given and figures it out regularly. If the funding rate is positive, people who bet that the price will go up have to pay people who bet that the price will go down. If the funding rate is negative, then the opposite happens. The rate is usually low, but it can change depending on the market.

When the future price is higher than the current price, the funding rate goes up, which encourages people to sell. On the other hand, when the price of futures is lower than the current price, the funding rate is negative, which motivates people to buy and hold onto assets for a long time. This system helps to stop big differences between the prices in the future and current markets.

A high amount of funding can show how people feel about the market and give traders chances to make money using trading tactics. Traders can watch funding rates to see how people feel about the market and change their investments based on that.

People who invest in Bitcoin hope to make a lot of money

Bitcoin almost reached $57,000 on Tuesday, its highest level since late 2021. This has brought its year-to-date gain to 32%. This makes it more expensive to hold risky bets in long-term futures, which is good for traders who don’t want to bet on the direction of the market.

Bitcoin is now valued at $56,629. 14, which is 0. 6% higher than it was an hour ago and 11. 2% higher than it was yesterday. The value of BTC today is 9. 4% more than it was a week ago.

Today, the total value of all cryptocurrencies is $2. 25 This is an increase of 7. 33% in the last day and 99. 41% in the last year. Currently, BTC’s value is worth $1. 11 trillion, and it makes up 49. 4% of the market. At the moment, stablecoins are worth $142 billion, which is 6. 32% of the entire crypto market value.

According to Velo Data and CoinGlass, the yearly funding rate in bitcoin futures traded on Binance has gone over 100% for the first time in at least a year. Bybit’s funding rate went up to 95% and Deribit’s funding rate went up to 56%.

Perpetuals are futures that don’t have an expiration date. They need funding rates to make sure they stay priced the same as the market. A positive funding rate means that perpetuals are priced higher than the spot price, and traders with long or purchase contracts have to pay a fee to traders holding short contracts. Exchanges gather money every eight hours.

In simpler terms, a high funding rate means people are feeling positive about the market and are using a lot of borrowing to make trades.

It’s important for traders to know funding rates so they can manage their positions and improve their trading strategies. It helps them to reduce risks and make the most money in the changing crypto market.

Warning: This is not advice on buying or selling stocks.

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