Funding rates show the cost of holding leveraged long or short positions in perpetual futures. When funding is strongly positive, longs are paying shorts—often a sign of crowded long positioning and higher liquidation risk. When funding turns negative, shorts pay longs—often reflecting fear, hedging, or bearish crowding.
What this indicator is
A measure of leverage demand in perpetual futures markets, expressed through periodic funding payments.
Why it matters
Extreme funding can signal late-stage momentum. Crowded leverage tends to unwind violently during pullbacks, amplifying volatility.
How to read it
- Green: Funding near neutral (balanced leverage).
- Yellow: Funding moderately positive (bullish leverage building).
- Red: Funding extreme (crowded positioning, higher squeeze/liquidation risk)
12-Month History + 12-Month Projection Chart
Note: Projection is a model estimate; watch for confirmation using open interest and exchange flows.
