Binance Coin (BNB) Funding Rate Spikes, Hinting at Potential Price Increase By The News Crypto

News Crypto –

  • (BNB) funding rate has skyrocketed to 0.013%.
  • BNB’s futures open interest (OI) rose to $429.29 million.
  • Technical indicators such as Chaikin Money Flow (CMF) and Fibonacci retracements suggest that BNB may continue its move towards $600.

Funding rates, a key indicator of derivatives market sentiment, have recently recorded a notable spike for Binance Coin (BNB), signaling a possible change in market dynamics.

Reflecting trader positioning, BNB’s funding rate spiked to 0.013% on July 3, raising questions about its impact on the cryptocurrency’s price.

Investor confidence in Binance Coin grows

The funding rate acts as a balancing mechanism between long and short positions in the derivatives market, however when anomalies occur, such as the recent spike in the BNB funding rate, it indicates a shift in investor behavior in favor of one side over the other.

Source: Santiment

Essentially, a very high funding rate means growing confidence in the coin’s price appreciation potential. Conversely, occasional moves into negative territory signify bearish sentiment.

The increase in funding rate indicates that the perpetual price is currently trading at a premium compared to the spot price. The price of BNB has fallen by 2.06% in the past 24 hours, but has increased in value within the past hour.

If this pattern persists, it is reasonable to assume that the coin will continue its upward trajectory. Interestingly, the trend exhibited by the funding rate mirrors the trend in futures open interest (OI), which represents the value of outstanding contracts in the market.

From a trading perspective, increased open interest is likely to support a price rise for BNB, as it has in the past. However, it is important to consider the cryptocurrency’s potential from a technical perspective as well.

Based on the daily chart, BNB may continue its rise towards the $600 levels.

This content was originally published on The News Crypto.

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