Funding Rates in Bitcoin and Ethereum Continue to Remain High: What Does It Mean?

Despite the decline in spot prices, Bitcoin and Ethereum perpetual forward funding rates remain high.

In the last 24 hours, Bitcoin price has decreased by 3.90% and Ethereum price has decreased by 5.70%.

According to today's QCP Capital market report, “Despite such a large spot move, persistent funding rates on individual investor-focused exchanges are still around 20-30%, meaning speculators are still taking leveraged long positions at the lows.”

QCP Capital analysts suggest that high funding levels may indicate that the current price correction in the cryptocurrency market may still continue:

“The forward curve is still surprisingly high. Even now, a 23% risk-free return can be achieved on the Ethereum April spot-forward spread. The table still sees strong interest to sell these spreads. “We think they won't be able to stay this high for much longer, especially if the market continues to fall.”

Cryptocurrency derivatives trader Gordon Grant says high funding rates are a sign of speculator longevity, indicating the extent to which speculators are willing to hold their positions in the market. Grant added that current high funding rates indicate the existence of “investors who are not long-term sellers but are still speculators.”

*This is not investment advice.