Indicator Notes｜$ERA ｜Funding Rate -0.0651%｜Shorts Pay
First, the definition: You can think of the funding rate as rent on a position. Whichever side pushes the contract price away from the spot price is often the side that pays.
Now, how to read it: Some people also treat extreme rates as a contrarian signal, but historically there have been cases where the price continued moving in the same direction even after the rate became elevated.
Don’t disrupt your original strategy based on a single number, and don’t use borrowed funds to test a reading.
First, the definition: You can think of the funding rate as rent on a position. Whichever side pushes the contract price away from the spot price is often the side that pays.
Now, how to read it: Some people also treat extreme rates as a contrarian signal, but historically there have been cases where the price continued moving in the same direction even after the rate became elevated.
Don’t disrupt your original strategy based on a single number, and don’t use borrowed funds to test a reading.