Indicator Notes｜$MEW ｜Funding rate -1.2%｜Shorts pay
First, the definition: only those still holding a position at the moment of settlement participate in paying or receiving funding. Positions closed before settlement neither pay nor receive.
Next, how to read it: the more the funding rate deviates from normal, the more crowded one side’s positions are. If the price reverses, the risk of cascading liquidations also increases.
The same data can mean completely different things in different market conditions, so don’t blindly apply a one-off rule of thumb.
#MEW
NFA. Do your own research.
First, the definition: only those still holding a position at the moment of settlement participate in paying or receiving funding. Positions closed before settlement neither pay nor receive.
Next, how to read it: the more the funding rate deviates from normal, the more crowded one side’s positions are. If the price reverses, the risk of cascading liquidations also increases.
The same data can mean completely different things in different market conditions, so don’t blindly apply a one-off rule of thumb.
#MEW
NFA. Do your own research.