Funding Rates for Bitcoin, Ether Remain Positive, Indicating Bullish Sentiment

Investors remain bullish about crypto in derivatives markets, as the CoinDesk Indices Ether Trend Indicator signals “significant uptrend”

AccessTimeIconJun 7, 2023 at 6:44 p.m. UTC
Updated Jun 7, 2023 at 6:49 p.m. UTC
  • Funding rates remain positive for both bitcoin and ether, indicating positive sentiment.
  • Bitcoin and ether have decoupled from traditional financial markets.
  • The Ether Trend Indicator signals a “significant uptrend.”

Long position traders remain willing to pay a fee to short position traders for bitcoin and ether, with this so-called funding rate indicating that crypto assets are bullishly charting their own course. Meanwhile, the CoinDesk Indices Ether Trend Indicator is signaling increased strength for the second largest cryptocurrency by market cap.

Funding rates are periodic payments that traders on perpetual futures markets pay from one side of the trade to the other. This fee is determined by the difference between spot prices and futures contract prices. When bitcoin futures prices are higher than spot prices, traders with long positions pay a fee to traders with short positions.

Funding rates ensure that spot and futures prices for crypto assets converge, as they do in traditional derivatives markets. Positive funding rates indicate positive investor sentiment, while negative rates indicate the opposite.

Funding rates for bitcoin and ether have been positive since May 14 and May 27, respectively. The positive sentiment comes as the Securities and Exchange Commission (SEC) has filed lawsuits against crypto exchange giants Binance and Coinbase for allegedly violating securities law, and targeted digital assets more broadly.

“We don’t need more digital currency. We already have digital currency, it's called the U.S. dollar”, stated SEC Chair Gary Gensler.

At the moment, market participants do not appear to share that sentiment, as bitcoin and ether prices reside near pre SEC announcement levels.

BTC, ETH decouple

BTC and ETH appear to have decoupled from nearly everything, except each other.

BTC correlations with the U.S. dollar, S&P 500, Nasdaq Composite and Copper are near zero, indicating little to no pricing relationship. BTC’s correlation with ether remains high at 0.79. Correlations range between 1 and -1, with the former indicating a direct relationship, and the latter indicating an inverse one.

Meanwhile the CoinDesk Indices Ether Trend Indicator (ETI), is signaling that the asset has entered a “significant uptrend,” an improvement over its reading just a day prior.

The ETI indicates the direction and strength of momentum in the asset using a series of moving averages. The one day improvement indicates that recent bullish price action is outpacing previous price moves.

Ether Trend Indicator (CoinDesk Indices)

Edited by James Rubin.


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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX