07 Dec 2021
Zooming out: May 19th vs December 4thThe negative funding rates reached levels not seen since June and May amid this snowballing liquidation cascade.
Source: NYDIG Data
The average funding rates on Saturday, Dec 4th fell towards -0.03%, reaching the most negative funding rates seen since May 19th, when funding rates bottomed at -0.06%.Following the May 19th crash, funding rates remained in neutral to negative terrain until the July 26th short squeeze in bitcoin. Throughout these two months, the bitcoin price slowly trended lower.May to July saw unusually low trading volumes in bitcoin, and the period saw several negative news revolving around bitcoin, in particular related to the Chinese bitcoin and mining ban.Now, the fear in the bitcoin market seems to be more related to fear impacting the broad financial markets in relation to Omicron and the hawkish FED. It remains to be seen if bitcoin follows the May trajectory this time around, but it is no doubt that the market is in a substantially different state now.