Three altcoins have seen bearish bets on Binance, which could help fuel the rally, an analytics firm has revealed.
Tron, Stellar, and 1inch have seen negative funding rates recently.
In new mail In X, on-chain analytics firm Santiment recently discussed the trend in Binance’s funding rate for a few different altcoins.
The “funding rate” is an indicator that tracks the periodic amount of fees that traders on a particular derivatives exchange (which in the current case is Binance) exchange with each other.
When the metric is positive, it means that long holders are paying a premium to short investors to hold their positions for the time being. This trend indicates that a bullish mindset is prevailing in the market.
On the other hand, an indicator below zero indicates that short investors currently outnumber long investors, and therefore the majority share a bearish sentiment.
Now, here is a chart showing the trend in Binance funding rate for three altcoins, 1inch Network (1INCH), Tron (TRX), and Stellar (XLM), over the past month:
Looks like the value of the metric has been red for all three of these coins recently | Source: Santiment on X
The chart above shows that Binance’s funding rate has been negative for all three of these altcoins recently, indicating that more traders have been trying to bet against price increases.
1inch appears to be the worst performer on this indicator, currently at -0.079%. While the red values on the metric indicate that the public was bearish, it may not be bad for its price.
This is because a mass liquidation event is most likely to affect the market with the largest number of positions. The likelihood of such a liquidation will be even higher if the positions in the market are highly leveraged. As Santiment explains,
When we see large bets against an asset, liquidations can occur that act as “rocket fuel” for the asset’s price to rise. Going against the skeptic crowd can pay off.
Therefore, it remains to be seen how the prices of these altcoins will evolve from here on out, given this potential rocket fuel brewing in the background.
TRX price
Tron, the largest of these three altcoins, had a down week, just like the rest of the crypto sector, but in terms of monthly returns, TRX investors didn’t have a bad time at all as the asset managed to outperform the likes of Bitcoin (BTC) with an 18% rise.
The chart below shows Tron’s recent performance.
The price of the altcoin appears to have gone up over the last few weeks | Source: TRXUSD on TradingView
Featured image by Dall-E, Santiment.net, chart by TradingView.com
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