Market Funding Rates Drift Back Toward Neutrality After Short-Term Rebound

As of October 24th, data from Coinglass indicates that funding rates on major centralized (CEX) and decentralized (DEX) exchanges are showing signs of normalization following a brief market rebound that lasted nearly two days. Multiple asset pairs have seen their funding rates return closer to neutral levels, suggesting a cooling of bullish momentum.

Market Still Slightly Bearish

Despite the stabilization, the overall sentiment remains slightly tilted toward the bearish side. This implies that traders are not yet fully confident in sustaining upward momentum after the recent recovery.

Understanding the Funding Rate Mechanism

The funding rate is a mechanism used by cryptocurrency trading platforms—particularly in perpetual futures contracts—to keep the contract price aligned with the spot price of the underlying asset. It represents a periodic payment exchanged between long and short traders, rather than a fee charged by the platform itself.

When the funding rate hovers around 0.01%, it reflects a neutral or benchmark level. Rates above this threshold typically signal a bullish market sentiment, while those below 0.005% suggest bearish conditions.