Crypto Futures Funding Rates Normalize After Bitcoin Drops to $35.6K

Cryptocurrency markets surged over the weekend, with open interest exceeding $35 billion, indicating traders' highly leveraged bets for higher prices—a nearly 40% increase from October. 

Surging open interest increased leveraged bets, elevating funding rates. Traders paid fees from 0.2% to 0.5% every eight hours, some up to 50 cents on a $100 position. 

Market watchers predicted a downturn, leading to Tuesday's drop with nearly 90% of bullish bets liquidated, exceeding $300 million, and significant losses for Bitcoin, Ether, XRP, and Solana futures.

If a trader cannot meet the margin requirements to keep a leveraged position open, the exchange steps in and closes the trade.

Analysts echo a 90% chance of a U.S. Bitcoin ETF approval in January, boosting market optimism.

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