$GTC Short positions in the perpetuals have paid funding 11 times since 4 p.m. the day before yesterday, totaling 6.4%, and the price has still risen 11.6%. By conventional wisdom, they should have been squeezed out by now, yet open interest in the perpetuals has actually climbed from 27.32 million tokens to 30.8 million.
A little after 9 a.m. yesterday, I wrote about GTC, judging that a pullback to 0.2187 was more likely than a breakout above 0.2642, because shorts willing to pay such a high funding rate were probably hedged. Two hours later, the perpetuals surged past 0.2642, and at 5 a.m. today the price hit a high of 0.2897. I was wrong. My invalidation condition was a drop in open interest below 24 million tokens. Instead, open interest kept rising and the price kept rising too—the condition itself was poorly chosen.
Here’s how the money is flowing: the perpetuals are now trading 1.8% below the index. Binance spot volume is only around 500,000 USDT an hour, while perpetuals volume is roughly ten times that. Shorts have been pressing the price down on the perpetuals, but spot buying is pulling the index up. The gap isn’t closing, so shorts have to pay every four hours. The account-based long ratio has risen from 56.2% to 60.0%, while large traders’ position-based long ratio has stayed around 51%. More of the short exposure is concentrated among a small number of large accounts.
These shorts are being forced to choose: if they don’t close, at today’s pace of three funding settlements, they’ll pay over 2% in a day; if they do close, they’ll have to buy back on the perpetuals—that’s what would really fuel a short squeeze. Open interest is still rising, which suggests they haven’t started to capitulate.
GTC itself had a very similar stretch: from 4 p.m. on October 2 to 8 a.m. on October 5, the funding rate was negative for nine settlements in a row, totaling 4.94%. The price rose from 0.129 to 0.175, then surged to 0.2488 on the 5th. By 8 a.m. on the 6th, the funding rate had recovered to -0.087%, and the daily candle fell 20.7%. But after the -2% reading at midnight on October 13, the price dropped 20% in just nine hours, so this is no hard-and-fast rule.
Technically, the daily upper Bollinger Band is at 0.2882. That 0.2897 spike overnight briefly pierced it before pulling back. The 4-hour RSI is 65.7, not yet overbought, and the 4-hour ATR is 0.0229. The lows over the past two days—0.2402, 0.2455, and 0.2537—have each been higher than the last.
This time, I’m not going to bet against it by calling a top. As long as the funding rate remains below -0.2% every four hours, 0.2897 will probably be tested again. If the rate recovers to within -0.05%, or a 4-hour candle closes below 0.2537, I’ll consider this move over. I’m still flat on GTC.
#GTC #FundingRate
A little after 9 a.m. yesterday, I wrote about GTC, judging that a pullback to 0.2187 was more likely than a breakout above 0.2642, because shorts willing to pay such a high funding rate were probably hedged. Two hours later, the perpetuals surged past 0.2642, and at 5 a.m. today the price hit a high of 0.2897. I was wrong. My invalidation condition was a drop in open interest below 24 million tokens. Instead, open interest kept rising and the price kept rising too—the condition itself was poorly chosen.
Here’s how the money is flowing: the perpetuals are now trading 1.8% below the index. Binance spot volume is only around 500,000 USDT an hour, while perpetuals volume is roughly ten times that. Shorts have been pressing the price down on the perpetuals, but spot buying is pulling the index up. The gap isn’t closing, so shorts have to pay every four hours. The account-based long ratio has risen from 56.2% to 60.0%, while large traders’ position-based long ratio has stayed around 51%. More of the short exposure is concentrated among a small number of large accounts.
These shorts are being forced to choose: if they don’t close, at today’s pace of three funding settlements, they’ll pay over 2% in a day; if they do close, they’ll have to buy back on the perpetuals—that’s what would really fuel a short squeeze. Open interest is still rising, which suggests they haven’t started to capitulate.
GTC itself had a very similar stretch: from 4 p.m. on October 2 to 8 a.m. on October 5, the funding rate was negative for nine settlements in a row, totaling 4.94%. The price rose from 0.129 to 0.175, then surged to 0.2488 on the 5th. By 8 a.m. on the 6th, the funding rate had recovered to -0.087%, and the daily candle fell 20.7%. But after the -2% reading at midnight on October 13, the price dropped 20% in just nine hours, so this is no hard-and-fast rule.
Technically, the daily upper Bollinger Band is at 0.2882. That 0.2897 spike overnight briefly pierced it before pulling back. The 4-hour RSI is 65.7, not yet overbought, and the 4-hour ATR is 0.0229. The lows over the past two days—0.2402, 0.2455, and 0.2537—have each been higher than the last.
This time, I’m not going to bet against it by calling a top. As long as the funding rate remains below -0.2% every four hours, 0.2897 will probably be tested again. If the rate recovers to within -0.05%, or a 4-hour candle closes below 0.2537, I’ll consider this move over. I’m still flat on GTC.
#GTC #FundingRate