$BTW Latest funding rate: -0.106% (settled every 4 hours). Shorts pay; simply annualized based on this period, it's about 232.2%.
While we're on the subject, let's talk about funding rates.
Annualization simply extrapolates the rate for this period over a year. The rate changes every period, so don't treat it as the actual cost for a year.
Some people also treat extreme funding rates as a contrarian indicator, but there have been cases where prices continued moving in one direction even after rates became extreme.
Indicators can fail, so don't skip your stop-loss: deciding in advance what to do if you're wrong is more important than guessing correctly.
#BTW
While we're on the subject, let's talk about funding rates.
Annualization simply extrapolates the rate for this period over a year. The rate changes every period, so don't treat it as the actual cost for a year.
Some people also treat extreme funding rates as a contrarian indicator, but there have been cases where prices continued moving in one direction even after rates became extreme.
Indicators can fail, so don't skip your stop-loss: deciding in advance what to do if you're wrong is more important than guessing correctly.
#BTW