Dec 7th 2021
Liquidation cascade sends funding rates down to negative territory
Funding rates plummeted deep into negative terrain following the Dec 4th crash but have since recovered into neutral territory.
Source: NYDIG Data
Amid the December 4th crash, funding rates plunged deep into negative terrain as long positions got liquidated in the market, leading to a large price deviation between the perps and the spot market.
During the crash, Deribit’s BTC price fell to $39,977, and the Binance perp reached a bottom of $40,988. Meanwhile, Coinbase reached a low of $42,333. FTX’s perp maintained a far closer peg to the spot market, reaching lows of $41,762.