$ALPACA In the image, the funding rate for the ALPACAUSDT Perp pair is shown as:
0.3008% / 00:35:01
This means that:
The rate is positive (0.3008#%), therefore long traders are paying this rate to those who are short.
The next payment will be in approximately 35 minutes.
Opinion:
This is an extremely high rate for a perpetual contract. Normally, a reasonable funding rate hovers around 0.01% - 0.03% every 8 hours.
Implications:
If you maintain a long position, you could lose a lot in funding fees, especially if you hold it for several hours or days.
Such a high rate may indicate that there are too many people in long (with bullish expectations), which increases the risk of a correction or sudden drop (squeeze on the longs).
Recommendation:
Avoid opening a long at this moment, unless it is a very quick trade justified by technical analysis.
If you are in long and already have profits, consider closing before the next payment to avoid excessive fees.
This is a good opportunity to look for a short entry, if the technical indicators and volume support it.
