$LAYER Funding Rate Hits -2% Per Hour: Short Traders Should Stay Cautious
Binance has made an unusual move: raising the funding rate cap to ±2% per hour, instead of the usual ±2% every 4 hours. At the same time, $LAYER’s funding rate is currently at -2% per hour, meaning short positions are paying a very high fee to longs — a situation that may significantly impact anyone holding short positions.
What does this mean?
A deeply negative funding rate shows that a large portion of traders are on the short side, creating an imbalance.
Paying -2% per hour adds up quickly: up to -48% a day just in funding fees, even before considering price movement.
What could happen?
Short squeezes are common in situations where funding remains extremely negative — if the price moves even slightly upward, shorts face pressure from both funding and liquidation.
However, this doesn’t guarantee a price reversal, as broader market conditions, sell pressure, and sentiment still play a role.
If you're holding a short...
Now’s the time to reassess risk management, especially since high funding can silently drain your position.
Ask yourself: if you expect more downside, can your short survive the funding drag?
On the flip side, if price stabilizes or moves up slightly, the cost of holding could outweigh potential gains.
In short:
Nobody can predict the market with certainty. But a -2% per hour funding rate clearly signals high tension between longs and shorts. If you're shorting, be aware: even if you're right on direction, funding fees could still erode your PnL.