FUNDING RATES EXPLAINED
Funding rates are a key indicator of market sentiment.
Here's how to interpret them:
• Bullish Signal: Funding rates below 0.005% mean demand for longs is moderate, suggesting a more sustainable uptrend. This is ideal for buying dips.
• Bearish Signal: Rates above 0.01% indicate excessive demand for longs, often followed by corrections as over-leveraged positions get liquidated.
How to Use This Data:
1. In a bullish setup, look for funding rates to stay green, confirming strength without over-leverage.
1. In a bearish scenario, watch for red funding rates—they signal potential reversals or volatility spikes.
Next Step:
Monitor funding rates closely, as they help identify safe entry and exit points in both short-term trades and long-term positions!
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