📊 What is the Funding Rate and why do traders pay attention to it? The Funding Rate is the fee between traders in the futures market. It shows who is currently dominating – longs or shorts. How it works: ✔ Positive funding → longs pay (which means the majority of the market is long) ✔ Negative funding → shorts pay (which means the majority has opened shorts) Why is this important? When there are too many of one side in the market, a move often occurs in the opposite direction. For example: 📉 Very negative funding → a lot of shorts ➡️ a short squeeze may begin 📈 Very positive funding → a lot of longs ➡️ the market may sharply drop. That’s why experienced traders look not only at the chart but also at market sentiment. Sometimes the best moves start when the majority is positioned the wrong way.
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