š Bottom line first: With RLCās funding rate, shorts are āpaying to bet on a dropāāand paying dearly.
What does an annualized rate of -161% mean? Shorts are continuously paying fees, which shows that bearish sentiment is extremely unanimous. But thereās an iron rule in the futures market: when sentiment is too unanimous, a reversal is often not far away. With short costs this high, itās getting harder and harder to hold positions. If the market rebounds, the wave of forced liquidations could be much stronger than usual.
My view is that with funding rates this extreme, shorting has become very poor value. Donāt chase shorts at these levelsāyou could easily get burned by a rebound. If you want to bet on a rebound, be clear that this is a short-term play, not a trend-based thesis.
$RLC #čµéč“¹ē #FuturesWatch
What does an annualized rate of -161% mean? Shorts are continuously paying fees, which shows that bearish sentiment is extremely unanimous. But thereās an iron rule in the futures market: when sentiment is too unanimous, a reversal is often not far away. With short costs this high, itās getting harder and harder to hold positions. If the market rebounds, the wave of forced liquidations could be much stronger than usual.
My view is that with funding rates this extreme, shorting has become very poor value. Donāt chase shorts at these levelsāyou could easily get burned by a rebound. If you want to bet on a rebound, be clear that this is a short-term play, not a trend-based thesis.
$RLC #čµéč“¹ē #FuturesWatch