Market structure · Chapter 7 of 31
What is the funding rate?
The periodic payment that keeps perpetual futures tethered to the spot price, and what it tells you about crowd positioning.
Perpetual futures never expire, so exchanges need a way to keep their price close to the underlying spot market. The funding rate is that mechanism: every few hours, one side of the market pays the other a small percentage of their position.
Who pays whom
When the rate is positive, longs pay shorts. That usually means traders are crowded into long positions and are willing to pay to keep them open. When the rate is negative, shorts pay longs, which points to crowded short positioning.
Why it matters
Funding is a live gauge of leverage and sentiment. Persistently high positive funding signals an overheated, crowded long side that can unwind quickly. A flip from positive to negative can mark a shift in who is in control.
How to read it here
We show the current funding rate per instrument and flag extremes. Treat sustained extremes as a sign of stretched positioning, not as a buy or sell instruction.
Now watch this signal update in real time across the market.
See it liveEducational content, not financial advice.