What is funding and why does it matter? 🚨
first definition the what it actually tells us
Boring answer: a mechanism that ensures that the price of a perpetual futures contract closely tracks the price of the underlying asset
now what does that tell us? 👀
Well, if funding is high (like on the left in the picture when we were at the ATH, and on the right where we are at rn) that means:
-market is overheated
-too much leveradge in the market
-high volatility
-potentially big moves
Also, when funding is high, a reset (meaning a dip) is not unlikely. 🔻
imo a good indicator when trading crypto!✅
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