Funding rates neutral since plunge below $35,000Funding rates did reach negative territory as BTC sold off below $38,000 and down towards $35,000. This was likely driven by fear and liquidations.However, funding rates have remained neutral since bitcoin fell below $35,000.This shows that perps have followed the spot market closely amid the shaky markets in recent days. Usually, funding rates tend to plummet following such sell-offs.
This could suggest that traders are more willing to add long exposure with bitcoin trading near the absolute bottom of its near 1.5 year-long trading range.Nevertheless, funding rates have still remained neutral to below neutral since December 4th, indicative of prevailing negative sentiment.
Futures premiums stays below 4%Futures basis still sit below 4% in the offshore market, mostly trailing around 3% in the offshore market.The FTX basis grew from 3% to 4% during yesterday’s mayhem in the market. Several factors might have contributed to this growth. It could be caused by growing demand for long exposure as bitcoin trades near its 1.5-year-long support, but it could also be caused by hedging activity related to the UST situation.Meanwhile, CME’s premium stays low, trailing around yearly lows. CME’s basis saw a decline towards the FOMC meeting last Wednesday, suggesting that institutional traders were concerned ahead of the interest rate hike decision.
The basis on CME has since climbed slightly, but it remains very low at 1.11%, in line with the low levels from February 28th.In sum, the futures basis shows that active traders in the market remain pessimistic, largely seeking to hedge.