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Positive BitMEX Financing Rate Impacts Bitcoin Contracts on BTC Price as the Former Hits 0.12%

Mostly all crypto derivative exchanges employ a funding rate on perpetual contracts. The funding rate is predetermined by the market trends and changes with time. Whenever the funding rate marks positive, Longs pay Shorts.

The relatively high funding rate of 0.14% could be traced to strong capital inflows for crypto derivative exchange, BitMEX. 5th of February is recorded as the day in this year that had the biggest net flow of Bitcoin into BitMEX, noted Jai Prasad, a crypto analyst at Token Analyst and Seed Invest.

Within a six-day range, BTC price surged to a high of $ 10,200 from $ 9,100 capturing a market gain of 9.2% within this period. A wave of elation blew across the market as BTC had broken off caps of its social volumes. Several analysts are in support of the view that bullish sentiments have taken hold of the markets. On the flip side, there are apprehensions as FOMO (fear of missing out) grips the market.

An exception to this scenario was seen in early 2019 so yes, there may be exceptional cases. But it follows that the funding rate above 0.12% has been an antecedent for large BTC pullbacks.

Kruger sees the possibility of a retracement afterward which may erase the gains, BTC has gathered the past weeks it had an uptrend.

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