2024-8-13 20:30

The price of Toncoin (TON), the cryptocurrency linked to the popular messaging app Telegram, has registered a double-digit rally over the past week.

However, despite this, short traders have maintained their bets against the altcoin, indicated by a persistent demand for TON shorts.

Toncoin Short Traders Are Unrelenting

At press time, TON trades at $6.27. Over the past seven days, the altcoin’s value has climbed by almost 20%. However, many traders have continued to open positions against a continued rally in its futures market. This can be gleaned from the coin’s negative funding rate across cryptocurrency exchanges.

As of this writing, TON’s funding rate is -0.028%. Per Santiment, the coin’s funding rate has been predominantly negative since June 13.

Toncoin Funding Rate. Source: Santiment

The funding rate is a mechanism used by perpetual futures contracts to keep the contract price in line with the underlying asset price.

When an asset’s funding rate is negative, it indicates more traders are taking short positions. This means that more traders anticipate a decline in the asset’s price than those buying it and hoping to sell at a higher price.

When more traders are willing to pay to maintain short positions, it suggests that the prevailing market sentiment is bearish.A sustained negative funding rate, like in TON’s case, indicates that the majority of the market expects the asset’s price to continue falling. It suggests a significant bearish outlook among traders.

The decline in TON whale holdings reflects this bearish outlook. According to IntoTheBlock’s data, TON’s large holders’ netflow has plummeted by over 250% in the last month.