Every time I see the funding rate get extreme again, my first reaction isn’t “Should I rush in?”—it’s to figure out who I’m actually pissed at... To put it bluntly, when the rate is that high and out of hand, it’s mostly emotions driving leverage, not logic driving new positions. Of course, trading the other side of the market can feel great—assuming you can withstand the next stretch of getting squeezed. If you can’t, don’t force yourself to play the hero; avoiding volatility is actually more like how a normal person would do it.

Recently, there have been people tying ETF fund flows, US stock risk appetite, and the rise and fall in the crypto space into one interpretation. It sounds pretty reasonable—but when you get down to something micro like funding rates, it’s often two sets of narratives “clashing”: macro says “risk on,” but the price action looks like it’s making you pay a price. My choice is usually pretty cowardly: if the funding rate is extreme but on-chain TVL doesn’t heat up along with it, I’d rather scale back and wait for it to cool off on its own. And if I really want to go against the grain, I’ll only use a small position as a hedge—I won’t use conviction as margin. For now, that’s the plan: I’m going to screenshot the funding rates of a few mainstream perps, and then decide tomorrow morning whether to make a move.