As they say in the cryptocurrency market now, 'another beautiful day in hell!'
Let's talk about one of the most underestimated threats to your wallet, funding rates, or as they are called in niche circles: 'the quiet death of bulls.'
Let's start with the basics: what are these rates and why do we need them at all?
It's like tipping a waiter, only the one who pays is the one who is overly confident.
If you're long and the market is overheated, you pay. If you're short and the market is in panic, you get paid.
Does that sound fair? Until you start paying 3 times a day, watching your favorite token drop like it’s MySpace stocks.
And now seriously: rates have started to fall. And not just fall, they are seeping through the floor.
According to Coinglass, funding rates on the largest exchanges are in the red zone.
In trader lingo, everyone is jumping into shorts as if the market is a scam coin launched by Elon Musk in a post-meme hangover.
Rates below 0.005%?
Congratulations. This is the official bear party. Enter through a short position, exit through liquidation.
Let's ask a question that no one wants to hear:
"Why has everyone suddenly become so confident in the market's decline?"
Because macro is scary?
Because ETFs no longer excite like they used to?
Because solid uncles are accumulating on the cheap while you short?
Answer: yes.
Caution: where bears are, there are bull traps.
Do you know what usually happens when the market is overloaded with shorts?
Correct. Short squeeze.
It's when your take-profit turns into a stop, and the price shoots up like Tesla on reverse thrust.
What should an ordinary person do?
If you're on spot - hold on tight.
If you're on futures - remember that liquidation is not an orgasm. It's a loss of funds.
But the main thing is, don't get carried away by the crowd.
When funding rates are heavily negative, it can be the loudest signal: 'Hey, maybe it's time to buy while everyone is shorting?'
