You hold a Long position waiting for price to rise but your account keeps shrinking due to Funding fees which many ignore even though they can eat up profits faster than price volatility

šŸ”¹ Funding Rate is a price balancing mechanism between Spot and Futures, ensuring that the derivative price doesn't deviate too far from the true value of the underlying asset.

šŸ”ø When Funding is positive, the market is euphoric, so Longs have to pay Shorts

  • so you will lose money every 8 hours even if the price remains stable

  • When Funding is negative, Shorts have to pay Longs.

šŸ”¹ Unusually high Funding signals an overly greedy crowd

  • Leading to a correction and consolidation

  • Conversely, deeply negative Funding indicates panic

  • and often signals an impending Short Squeeze.

šŸ”ø Carefully check Funding before holding a position overnight or consider buying Spot on Binance.

  • If you want to hold long-term to avoid fees and use it as a psychological indicator to go against the crowd

You are taking advantage of should this fee be used to generate additional passive income or considered a risk to be avoided?

This article is for reference only; it is not investment advice. Please read and consider carefully before making a decision.