As of December 26, data from Coinglass shows a clear shift in sentiment: funding rates on top-tier CEX and DEX venues are trending lower across most major crypto pairs, echoing a bearish outlook for perpetual contracts. This dynamic signals traders are dialing back leveraged risk as the cost of maintaining long exposure rises relative to the underlying asset price.

Fundamentally, the funding rate is a fee exchanged between long and short positions within perpetual contracts to tether contract pricing to the underlying asset price. The mechanism discourages extreme divergence, enabling exchanges to self-correct positions without direct platform charges.

Based on established thresholds, the funding rate baseline sits near 0.01%, with levels above this mark typically signaling a bullish tilt and levels below 0.005% signaling bearish pressure. The latest data show funding rates lingering near the lower end of the spectrum, reinforcing a cautious, risk-off stance among participants in perpetual contracts and wider crypto funding rates indicators.