Funding Rates Explained: Key Bullish and Bearish Signals
Bullish Signal :
Funding rates below 0.005% are typically green, signaling a bullish market.
This suggests that long positions are not overly dominant, and there’s less pressure for prices to rise sharply.
Bearish Signal :
Funding rates above 0.01% are red, signaling a bearish market.
When funding rates are high, it indicates that there’s more demand for short positions, which can lead to increased downward pressure on prices.
Key Takeaways:
Low Funding Rates :
Indicative of a healthy, balanced market with potential bullish trends.
High Funding Rates :
A sign of excessive leverage and potential for a market correction or bearish trend.
Next Move:
Monitor funding rates to gauge market sentiment and adjust your trading strategy accordingly.
Watch out when rates rise too high—it might be time to prepare for a potential drop.
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