Data shows Dogecoin is currently leading the top cryptocurrencies in terms of Funding Rate, suggesting a spike in long positioning among traders.
The Funding Rate refers to an indicator that keeps track of the average periodic amount of fees that perpetual futures traders of a given asset are exchanging between each other on the centralized derivatives platforms.
When the value of this metric is positive, it means the long investors are paying a premium to the short ones in order to hold onto their positions. Such a trend is a sign that the majority of the investors share a bullish mentality.
On the other hand, the indicator being under the zero mark suggests the short investors outweigh the long ones. This kind of trend implies a bearish sentiment is dominant in the sector.
As is visible above, the Funding Rate is currently positive for Bitcoin (BTC) and Ethereum (ETH). According to the analytics firm, this is a rebound compared to yesterday, when sentiment was bearish among the traders.
The indicator is standing at 0.0049% for BTC and 0.0062% for ETH. XRP (XRP), the fourth largest coin by market cap, also has a similar degree of bullish mood with the metric at 0.006%.
A coin that stands out for its sentiment, however, is the memecoin Dogecoin, as its Funding Rate is sitting at 0.0092%, notably higher than any other cryptocurrency
Then there is Tron (TRX) on the exact opposite side of the spectrum, with the bears paying the fee at a rate of -0.0087%. Solana (SOL) is exactly between the two with a neutral Funding Rate of 0.0012%.
Generally, the side that’s dominant on the Funding Rate is more likely to get wrapped up in a mass liquidation event. As such, for an asset like Dogecoin, where a bullish sentiment seems to be strong relative to the rest of the sector, the longs may be at more risk of getting squeezed.
While coins like Bitcoin, Tron, and BNB have more than 90% of their supply in the green, others like Dogecoin and Solana have the metric at less than 50%.
At the time of writing, Dogecoin is trading around $0.1666, down more than 15% over the last week.
