Hey traders, 🧑🏫 many newcomers to trading see the funding rate glowing green, especially when prices are deep in the red like they are with $NVDAB lately, but don’t understand what it means. They assume positive is good, but as it turns out…
💡 Here’s a simple way to think about it: the Funding Rate is like a “rental fee.” If you’re Long (betting the price will go up) on a coin, you’re renting a spot to hold that position. The Short side (betting the price will go down) owns the spot they’re renting out. When the Funding Rate is highly positive, it means the Long side has to pay the Short side to keep their positions open. So, the longer you hold a Long position, the more it costs you.
👀 Take a look at $NVDAB : the price is at $166.17, below the MA7 ($164.55), MA25 ($173.359), and MA99 ($195.326), while the RSI is also weak at just 38.6. Selling pressure is clearly in control. If the Funding Rate is still highly positive in this situation, it means that even though the price is “deep in the red” and the signals are weak, many traders are still trying to go Long and are willing to pay high fees.
💡 Here’s a simple way to think about it: the Funding Rate is like a “rental fee.” If you’re Long (betting the price will go up) on a coin, you’re renting a spot to hold that position. The Short side (betting the price will go down) owns the spot they’re renting out. When the Funding Rate is highly positive, it means the Long side has to pay the Short side to keep their positions open. So, the longer you hold a Long position, the more it costs you.
👀 Take a look at $NVDAB : the price is at $166.17, below the MA7 ($164.55), MA25 ($173.359), and MA99 ($195.326), while the RSI is also weak at just 38.6. Selling pressure is clearly in control. If the Funding Rate is still highly positive in this situation, it means that even though the price is “deep in the red” and the signals are weak, many traders are still trying to go Long and are willing to pay high fees.
