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Daily On-Chain Snap #47

Exclusive Research

Reset in funding rates supports sustainable price discovery

The metric above captures 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.

The weekend trading session saw meaningful reduction across funding rates. This closely aligns with the low spot volume seen as traders unwinded bullish bets ahead of the taproot update. This is reminiscent of the ‘buy the rumor, sell the news’ behavior by short-term traders. Notably, the reset across funding rates remains constructive for bitcoin’s current leg higher.

Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.

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