$BTW latest funding rate: -0.099% (settled every 4 hours). Shorts pay, which works out to an annualized rate of about 216.7% based on this period.
Let’s use this figure to talk about funding rates.
You can think of the funding rate as a toll for holding a position: whichever side pushes the futures price away from the spot price is usually the one that pays.
The farther the rate strays from normal, the more crowded one side’s positions are. If the price then moves in the opposite direction, the risk of a cascade of stop-losses increases.
Any indicator merely summarizes past price movements; the market could just as easily move in the opposite direction.
Let’s use this figure to talk about funding rates.
You can think of the funding rate as a toll for holding a position: whichever side pushes the futures price away from the spot price is usually the one that pays.
The farther the rate strays from normal, the more crowded one side’s positions are. If the price then moves in the opposite direction, the risk of a cascade of stop-losses increases.
Any indicator merely summarizes past price movements; the market could just as easily move in the opposite direction.