Perpetual funding rate for Bitcoin turned negative for 3rd time in 2023

Definition

The average funding rate (in %) set by exchanges for perpetual futures contracts. When the rate is positive, long positions periodically pay short positions. Conversely, when the rate is negative, short positions periodically pay long positions.

Quick Take

• The perpetual funding rate has turned negative for the third time this year.
• Each time the funding rate has gone negative, a rise has been seen in short liquidations with an increase in BTC price.
• In January and February, funding rates were short and sharp; the January funding rate lasted slightly longer than February.
• Will this be the third time a charm for bears?

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