The old dog took a quick look at the order book of this $AMAT TradFi perp. Without saying anything else, the funding rate is 0.00000000% paired with a 9.549% price increase—this combination is way too abnormal. Normally, once it has already risen to this extent, funding would have long since turned positive, at least starting from around 0.01%. But right now, the open interest on the perpetual contract is only 6,554 dollars—this basically exposes everything underneath. There’s clearly no big money following through on the contract side; this bullish candle is almost entirely pushed up by spot or with very light leverage.
Why is the funding rate not moving? Because the longs don’t dare to use leverage, and the shorts are too lazy to open positions. On the Binance Chain, the liquidity of U.S.-stock-style contracts isn’t that thick in the first place. With OI this thin, even if it rises ten percentage points, the funding stays at zero—this shows that longs aren’t crowded. But it also indicates there’s no ongoing backstop—no real continued buyers stepping in. I’ve watched several similar small-sized TradFi perps. After they pull up a sudden low-OI breakout and a sharp bullish spike, they often reverse within a day or two. That’s because once the capital that pulled the move stops showing up, any small amount of spot selling pressure can smash the price back down. Only then do the contract shorts slowly come in; by the time they do, the funding often flips positive belatedly. When it finally reaches that moment, the dip-buy long positions often become fuel.
I worked out the levels: at the moment the price is 716, and the old dog’s bottom line is around 680.
Trading tag: #BinanceFutures #TradFi #USDⓈM #AMAT #AMATUSDT $AMAT
Why is the funding rate not moving? Because the longs don’t dare to use leverage, and the shorts are too lazy to open positions. On the Binance Chain, the liquidity of U.S.-stock-style contracts isn’t that thick in the first place. With OI this thin, even if it rises ten percentage points, the funding stays at zero—this shows that longs aren’t crowded. But it also indicates there’s no ongoing backstop—no real continued buyers stepping in. I’ve watched several similar small-sized TradFi perps. After they pull up a sudden low-OI breakout and a sharp bullish spike, they often reverse within a day or two. That’s because once the capital that pulled the move stops showing up, any small amount of spot selling pressure can smash the price back down. Only then do the contract shorts slowly come in; by the time they do, the funding often flips positive belatedly. When it finally reaches that moment, the dip-buy long positions often become fuel.
I worked out the levels: at the moment the price is 716, and the old dog’s bottom line is around 680.
Trading tag: #BinanceFutures #TradFi #USDⓈM #AMAT #AMATUSDT $AMAT