How to Read Funding Rate (The Simple Way)

1️⃣ What is funding rate?
Funding rate is a periodic fee between long and short traders in futures.
Its goal: keep futures price close to spot price.

2️⃣ Funding rate > 0
👉 Longs pay Shorts
👉 Market is bullish / crowded on longs

3️⃣ Funding rate < 0
👉 Shorts pay Longs
👉 Market is bearish / crowded on shorts

4️⃣ Why funding rate matters
• High positive → risk of long squeeze
• Deep negative → potential short squeeze

5️⃣ Simple rule
Extreme funding rate = be careful
Neutral funding rate = healthier market

Funding rate doesn’t predict direction,
it shows crowd positioning.

Trade the chart,
but respect the crowd data
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