Funding rates reveal clues: Data from major exchanges indicate market sentiment is turning bearish

[BlockBeats] On December 6, I noticed an interesting phenomenon while looking at the market—after checking Coinglass data, it turns out that both centralized exchanges and on-chain DEXs are currently showing bearish signals through their funding rates.

Let me briefly explain what this funding rate is: it’s actually the fee paid between long and short positions in perpetual contracts, with the platform taking no cut. The purpose of this mechanism is to prevent contract prices from deviating too far from spot prices. You can think of it as a thermometer for market sentiment.

How do you read this thermometer? There’s an industry-accepted standard: 0.01% is considered a neutral level. If the rate is higher than that, it means longs are dominant and willing to pay shorts, signaling an optimistic market. But if the rate drops below 0.005%, it’s the opposite—shorts are stronger and the overall sentiment is rather pessimistic.

Looking at the current funding rates for major tokens, the numbers don’t look great—right now, bears are clearly in control. At times like this, people are either waiting for some major event to happen or they simply have no confidence in the short-term outlook.