$MUU Over the past 24 hours, it has risen by 9.35%, and the price has reached 38.59. What’s interesting, though, is that the funding rate is still holding steady at zero. This usually isn’t a common situation. A zero funding rate means that in the current futures contract market, neither the long side nor the short side has to pay the other; at some moment, positioning intent reached a static balance.
My read is that this upward price structure paired with a zero funding rate is driven by two groups of new capital entering at the same time. The longs are pushing the price up, but the shorts don’t concede and close positions just because the price is rising. Instead, new short-side capital comes in to hedge, pushing the financing cost back to neutral. The position size of 192106.62 in itself isn’t extreme, but combined with the price increase and the funding rate being flat, it suggests this isn’t a zero-sum game of existing capital. It’s incremental capital being repriced around the 38 level for this on-chain “US stock” style futures contract.
The strongest counterargument is: this is merely a rest stop in the middle of the rally. A zero funding rate could also be because the longs haven’t accumulated enough of a financing-cost advantage yet. Once the price keeps climbing and breaks through a certain psychological level, the funding rate will quickly turn positive. Then those lagging longs chasing the breakout would become the ones paying the funding. My view will start to fail when the price keeps holding above 38.60 while the funding rate still doesn’t move at all. That would imply the short-side force may be weaker than I think, and the balance could be illusory.
Next, the ones who are forced into action are the shorts that built their positions at lower levels. If the price stays at the current level or continues moving up, their unrealized losses will grow as the price rises. But in a zero-funding environment, they can’t receive funding payments from the longs to cushion the pressure. They’ll face a choice: either cut losses and close to push the price higher, or add to positions and hold on with stubborn risk-taking—yet that would further increase open interest and plant seeds for even more severe volatility in the future.
The moves are pretty clear. Current price is 38.59, funding rate is 0, and open interest is increasing. This is an observation period where longs and shorts are roughly matched. An aggressive approach: when the price pulls back to 38.20 and the funding rate hasn’t turned positive, try a small long position—bet that the balance breaks upward. A conservative approach: wait until the price clearly breaks above 38.60 and the funding rate turns positive as well, then follow only after confirming the longs have gained the funding-rate advantage. A risk-avoidance approach: move away directly now, because with a zero-funding state, the direction of any breakout can be random, making you prone to getting hit from both sides in a false breakout.
A falsifiable counter-consensus: the market might think a zero funding rate means the rally lacks momentum. I think that’s actually the starting line for a new round of the game.
Trading tag: #TradFi #链上美股 #MUU
Where do you think this whole thesis is most likely to be wrong?
My read is that this upward price structure paired with a zero funding rate is driven by two groups of new capital entering at the same time. The longs are pushing the price up, but the shorts don’t concede and close positions just because the price is rising. Instead, new short-side capital comes in to hedge, pushing the financing cost back to neutral. The position size of 192106.62 in itself isn’t extreme, but combined with the price increase and the funding rate being flat, it suggests this isn’t a zero-sum game of existing capital. It’s incremental capital being repriced around the 38 level for this on-chain “US stock” style futures contract.
The strongest counterargument is: this is merely a rest stop in the middle of the rally. A zero funding rate could also be because the longs haven’t accumulated enough of a financing-cost advantage yet. Once the price keeps climbing and breaks through a certain psychological level, the funding rate will quickly turn positive. Then those lagging longs chasing the breakout would become the ones paying the funding. My view will start to fail when the price keeps holding above 38.60 while the funding rate still doesn’t move at all. That would imply the short-side force may be weaker than I think, and the balance could be illusory.
Next, the ones who are forced into action are the shorts that built their positions at lower levels. If the price stays at the current level or continues moving up, their unrealized losses will grow as the price rises. But in a zero-funding environment, they can’t receive funding payments from the longs to cushion the pressure. They’ll face a choice: either cut losses and close to push the price higher, or add to positions and hold on with stubborn risk-taking—yet that would further increase open interest and plant seeds for even more severe volatility in the future.
The moves are pretty clear. Current price is 38.59, funding rate is 0, and open interest is increasing. This is an observation period where longs and shorts are roughly matched. An aggressive approach: when the price pulls back to 38.20 and the funding rate hasn’t turned positive, try a small long position—bet that the balance breaks upward. A conservative approach: wait until the price clearly breaks above 38.60 and the funding rate turns positive as well, then follow only after confirming the longs have gained the funding-rate advantage. A risk-avoidance approach: move away directly now, because with a zero-funding state, the direction of any breakout can be random, making you prone to getting hit from both sides in a false breakout.
A falsifiable counter-consensus: the market might think a zero funding rate means the rally lacks momentum. I think that’s actually the starting line for a new round of the game.
Trading tag: #TradFi #链上美股 #MUU
Where do you think this whole thesis is most likely to be wrong?