Crypto market sentiment is positive despite BTC price weakness, CoinDesk 20 Perpetual Futures Show shows

Crypto traders' outlook for the broader market remains positive, even as Bitcoin (BTC), the leading digital asset by market value, has lost over 10% in market value since spot ETFs debuted in the US a week ago.

That's the message from the bullish exchange's perpetual futures market tied to the CoinDesk 20 Index (CD20), where funding rates were positive early Thursday. Bullish is the owner of CoinDesk.

Perpetuals are futures with no expiration date with a funding rate mechanism that provides for periodic payments between long (buy) and short (sell) traders to ensure that the price of the perpetual bonds matches the underlying index price.

A positive funding rate means that perpetual contracts are trading at a premium to the index price, with long positions paying funding fees to short positions, indicating bullish market expectations. A negative interest rate suggests otherwise.

At 06:50 UTC, the funding rate in USDC-denominated CD20 perpetual futures was 0.0175%, indicating that leverage is rather bullish. Crypto exchange Bullish calculates the funding rate hourly and debits or credits the amount to users' accounts according to their positions.

CoinDesk Indices, a subsidiary of CoinDesk, introduced the CoinDesk20 index on Wednesday. The CoinDesk 20 is a broad benchmark for the crypto market, accounting for over 90% of the total value. While Bitcoin and Ether (ETH) make up a little over 50% of the index, other tokens such as Filecoin (FIL), Stellar's XLM, Aptos' APT, XRP, Dogecoin (DOGE) and others make up the rest, making it an S&P makes 500-like gauge.

Since its launch, Bullish CD20 perpetual contracts have recorded trading volume of nearly $18.11 million. (The amount is obtained by multiplying the 24-hour volume by the index price.)

The positive sentiment reflected in the CD20 perpetual futures is consistent with the positioning in perpetual futures for individual cryptocurrencies.

According to Velo Data, annualized funding rates in perpetual futures tied to the top 25 cryptocurrencies by market cap and traded on major exchanges like Binance have been consistently positive, hovering around 10% to 12% since last Thursday. Binance and several other exchanges charge funding fees every eight hours.

A similar pattern can be observed with mid-cap tokens.