$AVGO Old Dog was glued to the screen and almost sprayed coffee everywhere. 23 hours ago, the funding rate was hovering around 0.0003, but just now I glanced and it shot up to 0.00110848, nearly quadrupling. Meanwhile, in the last 24 hours, it dropped by 15.346%, with the price crashing down to 405.22. When this combo hit, alarms started ringing in Old Dog's head.
With the price dropping like this, the funding still running high in positive territory, what does it mean? The bulls haven't thrown in the towel; they’re still adding margin. Remember, a funding rate greater than 0 means the bulls are paying the bears—this is a hard rule. Right now, it’s a bunch of long positions getting hit, but no one's willing to exit; instead, some think it’s a sale and are eager to average down. Open Interest (OI) is currently around 45407, not overly dramatic, but considering the 113 million trading volume, there’s no shortage of bottom-fishing liquidity. Old Dog has seen this structure many times. When funding remains elevated during a downtrend, it often means the liquidation fuel hasn't burned out yet. If we keep seeing a downtrend, these stubborn bulls are the fuse for a chain reaction of liquidations.
The semiconductor sector hasn’t had a clear collective narrative lately; the $AVGO sell-off feels more like an internal chip structure issue. Old Dog checked the on-chain activity, and the turnover of large addresses has noticeably accelerated in the past couple of days, with wallets of much larger than usual volume offloading near 420, pushing the price down to the current 405 range. This isn’t retail panic selling; it’s a planned reduction. The last similar setup was earlier this year, where funding maintained high levels during a drop, and OI increased instead of decreasing, resulting in a 12% price stagnation before it turned back.
Old Dog's strategy is straightforward: at this position, I won’t catch a falling knife. 405 looks cheap, but the funding not dropping indicates the bulls are still holding on, and there’s still downside risk. My trigger conditions are if funding drops below 0.0004, or if OI sees a daily shrink of over 20%, which would indicate some are cutting losses and others are running, ensuring the chips have been cleared. Only then will I consider a light long position. If the price continues to break below 398, I might even open a small short position to ride the downward trend.
Trading tags: #BinanceFutures #TradFi #USDⓈM #AVGO #AVGOUSDT $AVGO
With the price dropping like this, the funding still running high in positive territory, what does it mean? The bulls haven't thrown in the towel; they’re still adding margin. Remember, a funding rate greater than 0 means the bulls are paying the bears—this is a hard rule. Right now, it’s a bunch of long positions getting hit, but no one's willing to exit; instead, some think it’s a sale and are eager to average down. Open Interest (OI) is currently around 45407, not overly dramatic, but considering the 113 million trading volume, there’s no shortage of bottom-fishing liquidity. Old Dog has seen this structure many times. When funding remains elevated during a downtrend, it often means the liquidation fuel hasn't burned out yet. If we keep seeing a downtrend, these stubborn bulls are the fuse for a chain reaction of liquidations.
The semiconductor sector hasn’t had a clear collective narrative lately; the $AVGO sell-off feels more like an internal chip structure issue. Old Dog checked the on-chain activity, and the turnover of large addresses has noticeably accelerated in the past couple of days, with wallets of much larger than usual volume offloading near 420, pushing the price down to the current 405 range. This isn’t retail panic selling; it’s a planned reduction. The last similar setup was earlier this year, where funding maintained high levels during a drop, and OI increased instead of decreasing, resulting in a 12% price stagnation before it turned back.
Old Dog's strategy is straightforward: at this position, I won’t catch a falling knife. 405 looks cheap, but the funding not dropping indicates the bulls are still holding on, and there’s still downside risk. My trigger conditions are if funding drops below 0.0004, or if OI sees a daily shrink of over 20%, which would indicate some are cutting losses and others are running, ensuring the chips have been cleared. Only then will I consider a light long position. If the price continues to break below 398, I might even open a small short position to ride the downward trend.
Trading tags: #BinanceFutures #TradFi #USDⓈM #AVGO #AVGOUSDT $AVGO