𝗪𝗵𝗮𝘁 𝗶𝘀 𝗙𝘂𝗻𝗱𝗶𝗻𝗴 𝗥𝗮𝘁𝗲 𝗶𝗻 𝗖𝗿𝘆𝗽𝘁𝗼 𝗣𝗲𝗿𝗽𝗲𝘁𝘂𝗮𝗹 𝗙𝘂𝘁𝘂𝗿𝗲𝘀?
Funding Rate is a small fee exchanged between long and short traders to keep the perpetual contract price close to the spot price.
𝑯𝒐𝒘 𝒊𝒕 𝒘𝒐𝒓𝒌𝒔
When Funding Rate is positive→ Longs pay Shorts
(Market is bullish / overheated)
When Funding Rate is negative → Shorts pay Longs
(Market is bearish / overcrowded on shorts)
𝑾𝒉𝒚 𝒊𝒕 𝒎𝒂𝒕𝒕𝒆𝒓𝒔
Extremely high positive funding often signals overcrowded longs → higher chance of a long squeeze Strongly negative funding can signal potential short squeeze It acts as a real-time sentiment gauge for leveraged traders.
MY Opinion ..
Don’t just look at price. Always check the funding rate alongside Open Interest. Extreme funding + high OI is a warning sign.
Understanding funding helps you avoid getting trapped on the wrong side of the market.
$SOXSB
$APPB
$XTZ
#Write2Earn
Funding Rate is a small fee exchanged between long and short traders to keep the perpetual contract price close to the spot price.
𝑯𝒐𝒘 𝒊𝒕 𝒘𝒐𝒓𝒌𝒔
When Funding Rate is positive→ Longs pay Shorts
(Market is bullish / overheated)
When Funding Rate is negative → Shorts pay Longs
(Market is bearish / overcrowded on shorts)
𝑾𝒉𝒚 𝒊𝒕 𝒎𝒂𝒕𝒕𝒆𝒓𝒔
Extremely high positive funding often signals overcrowded longs → higher chance of a long squeeze Strongly negative funding can signal potential short squeeze It acts as a real-time sentiment gauge for leveraged traders.
MY Opinion ..
Don’t just look at price. Always check the funding rate alongside Open Interest. Extreme funding + high OI is a warning sign.
Understanding funding helps you avoid getting trapped on the wrong side of the market.
$SOXSB
$APPB
$XTZ
#Write2Earn
