This one isn’t simple.
I saw a few sets of “imitation” rate data and I was stunned. MOVE, STORJ, and BMT all have negative funding rates below -0.3%—what does that even mean? The shorts are almost squeezed into sardine cans. Normally, contract funding rates hover somewhere between -0.1% and 0.1%. These ones are literally three times that, which means there are far too many people shorting.
I’ve fallen into this kind of trap before. Back then STORJ had shorts packed extremely tightly—then at midnight a single needle popped and blew up by more than a few dozen percentage points. The scene of the “air force” stopping out and trampling over each other was too hilarious to watch. When funding rates are extremely negative, the shorts are actually the truly dangerous side—they can’t withstand sudden rebounds.
BNC is the opposite, though: a positive funding rate of 0.3%, with severe accumulation among the longs. However, BNC’s liquidity is thin to begin with—be careful about sudden wick-ups.
Also, regarding $BTC here: the funding rate at 0.0056% is still healthy, but the price has already been smashed from 80,900 down to 79,000. The short-side strength isn’t weak either. If the low at 77,800 can’t hold, I think we may have to look for lower prices again.
Recently I’ve been doing cross-exchange funding-rate arbitrage: go long on Binance for the coins with higher negative funding rates, and short them on smaller exchanges to capture the funding-rate spread. These extreme negative funding-rate cases could be considered—but don’t take oversized positions. If you get wicked and pierced, you’ll be doing all that for nothing.
Have any of you ever seen funding-rate extremes directly flip into a reversal? I’ll watch this STORJ setup for now.
#Write2Earn #Crypto
⚠️ Personal opinion only, not investment advice.
I saw a few sets of “imitation” rate data and I was stunned. MOVE, STORJ, and BMT all have negative funding rates below -0.3%—what does that even mean? The shorts are almost squeezed into sardine cans. Normally, contract funding rates hover somewhere between -0.1% and 0.1%. These ones are literally three times that, which means there are far too many people shorting.
I’ve fallen into this kind of trap before. Back then STORJ had shorts packed extremely tightly—then at midnight a single needle popped and blew up by more than a few dozen percentage points. The scene of the “air force” stopping out and trampling over each other was too hilarious to watch. When funding rates are extremely negative, the shorts are actually the truly dangerous side—they can’t withstand sudden rebounds.
BNC is the opposite, though: a positive funding rate of 0.3%, with severe accumulation among the longs. However, BNC’s liquidity is thin to begin with—be careful about sudden wick-ups.
Also, regarding $BTC here: the funding rate at 0.0056% is still healthy, but the price has already been smashed from 80,900 down to 79,000. The short-side strength isn’t weak either. If the low at 77,800 can’t hold, I think we may have to look for lower prices again.
Recently I’ve been doing cross-exchange funding-rate arbitrage: go long on Binance for the coins with higher negative funding rates, and short them on smaller exchanges to capture the funding-rate spread. These extreme negative funding-rate cases could be considered—but don’t take oversized positions. If you get wicked and pierced, you’ll be doing all that for nothing.
Have any of you ever seen funding-rate extremes directly flip into a reversal? I’ll watch this STORJ setup for now.
#Write2Earn #Crypto
⚠️ Personal opinion only, not investment advice.