How Does Market Sentiment Influence the Perpetual Futures Basis More than in Traditional Futures?

Market sentiment has a more pronounced effect on the perpetual futures basis because there is no expiration date to force convergence with the spot price. In traditional futures, arbitrageurs can lock in a risk-free profit if the basis grows too large, knowing the prices must converge at expiry.

In perpetuals, the only anchoring force is the funding rate. This makes the basis a purer, more direct reflection of speculative demand and prevailing market sentiment, as it represents the immediate premium traders are willing to pay for leveraged long or short exposure.