Crypto funding rates are calculated using two components: the market's interest rate and the difference between perpetual contract prices and the spot price of the cryptocurrency. Interest Rate: This part reflects general borrowing costs in the financial market.
What are Futures funding rates in cryptocurrency trading?
Futures funding rates in cryptocurrency trading are mechanisms used by exchanges to align the prices of perpetual contracts with the underlying asset's spot price.
What are the nuances of funding rates in cryptocurrency trading?
In cryptocurrency trading, the nuances of funding rates are significant indicators of market dynamics: Positive (Bullish) Funding Rates: A positive funding rate indicates that the price of the perpetual contract is higher than the spot price of the underlying asset, typically reflecting bullish sentiment.
