Yield Curve Reversal Strategy (Funding Rate Reversal)

Logic Explanation: This strategy is specifically designed for moments when the “funding rate has become too high to sustain.” When the rate is so high that longs have to lose more than 0.5\% of their principal every day, even if the price doesn’t fall, longs will close their positions voluntarily due to cost pressure.

* Detailed Operations:

1. Lock in the rate: Find cryptocurrencies whose annualized rate exceeds 100\%.

2. Time window: Observe for 5 minutes before the funding rate is settled (e.g., 08:00, 16:00, 24:00).

3. Logic: Many arbitrageurs will close their positions in an instant right after the funding rate settlement, causing sell pressure to appear within a few minutes after settlement.

4. Execution: Open a short position at a high level before settlement, or profit from that moment of the “liquidity dip” immediately after settlement.
$ETH