Decoding BNB’s ‘Red’ Status: Unveiling Traders’ True Position

Introduction

BNB’s futures market participants are actively opening trade positions, betting against the asset’s price. Recently, BNB’s Funding Rate turned negative, and key indicators on the price chart suggest a continued decline.

Bearish Sentiments in BNB’s Futures Market

Bearish sentiments have overridden Binance Coin’s (BNB) Futures market as the coin’s Funding Rates across cryptocurrency exchanges turned negative, according to AMBCrypto’s analysis of Coinglass data. Funding Rates are a mechanism used in perpetual Futures contracts to ensure that the contract price stays close to the spot price. If an asset’s contract price is higher than its spot price, traders who hold long positions pay a fee to traders shorting the asset. Conversely, if the contract price is lower than the spot price, short traders pay a fee to traders holding long positions, resulting in negative Funding Rates. When an asset’s Funding Rate is negative, it indicates that more traders are holding short positions, suggesting an anticipation of the asset’s price to fall.

• On the 1st of April, BNB’s Funding Rates returned a negative value of -0.013%.
• The month has also witnessed a minor decline in the coin’s Futures Open Interest, decreasing by 0.16% according to Coinglass data.
• This decline in Open Interest signals a hike in short-term bearish sentiment as more traders close positions without opening new ones.

Spot Market Analysis

Assessment of BNB’s key indicators on a 1-day chart also showed a bearish trend:

• Readings from its Directional Movement Index (DMI) showed the positive directional index (green) resting below the negative index (red), indicating stronger bearish momentum.
• Additionally, the coin’s MACD line, positioned under its signal line, appeared poised to breach the zero line in a downtrend.

These indicators suggest a prevailing bearish sentiment in both futures and spot markets for BNB.