When the funding rate gets extreme, my first reaction isn’t “to rush in,” but to first check who’s really hard-carrying this move: is it FOMO-fueled chasing, or that kind of passive crowding-out short squeeze? Plainly speaking, when the rate is ridiculously high, taking the other side can be tempting—but you have to accept that prices can stay even more absurd for a while. Don’t expect to enter and have things turn rational immediately… I usually go with two options: either take a small position and creep against the trend, placing a very conservative stop-loss; or just stay out and wait for volatility to wash through the leverage again.

Lately, the airdrop season has everyone “clocking in to work” and grinding on task platforms. The stricter the anti-witch measures get, the more sieve-like everyone becomes. On-chain behavior has become even more “template-driven,” and ironically, that makes it easier for everyone to get pushed into the same side together during extreme market conditions—so the funding rate is more likely to blow up. In any case, I’d rather make a little less right now than have my margin pierced by a single needle.