🔶 What is the Funding Rate? The real pulse of the futures market

In Perpetual Futures trading, there is a silent but decisive piece of data:

the Funding Rate.

Many ignore it… professional traders keep a close eye on it.

📌 What is it?

It is a periodic payment between LONG vs SHORT traders, designed to keep the futures contract price close to the spot price.

It is not Binance that charges you…

It is the traders who are on the opposite side of your trade.

📌 How does it work?

Positive Funding Rate (+):

Longs pay shorts.

The market is dominated by buyers.

Negative Funding Rate (–):

Shorts pay longs.

The market is dominated by sellers.

📌 Why does it matter?

Because the funding rate is a direct window into market sentiment:

🔥 High positive rates → euphoria, over-leverage, risk of correction.

🥶 Deep negative rates → fear, capitulation, high rebound potential.

📌 How to use it to your advantage:

Identify extremes to anticipate aggressive movements.

Avoid entering long when the rate is too high — you are paying to enter late.

Leverage strategies neutralizing rates and hunting volatility.

📍 For many, the chart is the light…

But the Funding Rate is the shadow that reveals what is not seen.