The funding rate for $ERA has reached -1.6435%, a negative value. The current price is 0.0838.
When most people see a negative funding rate, their first thought is: “Shorts have to pay, so longs have the advantage.” That reaction is exactly the problem. A negative funding rate means the short side has to keep paying to maintain its positions. The more extreme the rate, the more crowded the shorts are. And the crowded side is never the safe side.
Think about it: shorts are paying 1.6435% a day. As long as the price doesn’t keep falling, that cost is eating into their margin. The longer it goes on, the greater the pressure to liquidate. And once these traders start closing their positions, they have to buy back, which can push the price up. That’s why an extremely negative funding rate is often a contrarian signal, not evidence that the trend will continue.
The current price of 0.0838 is the reference point for now. With the funding rate this high, the real question isn’t “How much further can it fall?” but “How many days can short sellers bear this cost?”
#ERA
When most people see a negative funding rate, their first thought is: “Shorts have to pay, so longs have the advantage.” That reaction is exactly the problem. A negative funding rate means the short side has to keep paying to maintain its positions. The more extreme the rate, the more crowded the shorts are. And the crowded side is never the safe side.
Think about it: shorts are paying 1.6435% a day. As long as the price doesn’t keep falling, that cost is eating into their margin. The longer it goes on, the greater the pressure to liquidate. And once these traders start closing their positions, they have to buy back, which can push the price up. That’s why an extremely negative funding rate is often a contrarian signal, not evidence that the trend will continue.
The current price of 0.0838 is the reference point for now. With the funding rate this high, the real question isn’t “How much further can it fall?” but “How many days can short sellers bear this cost?”
#ERA