📊 MARKET STRUCTURE: FUNDING RATE
Funding is a payment mechanism used by perpetual futures markets to help keep contract prices aligned with spot prices.
• 🟢 Positive funding → longs pay shorts
• 🔴 Negative funding → shorts pay longs
• 📈 Persistent positive funding can show stronger demand for longs
• 📉 Persistent negative funding can show stronger demand for shorts
• ⚠️ Funding alone does NOT predict whether price will rise or fall
QUICK CHECK:
Price ↑ + Funding ↑
→ More bullish positioning may be entering.
Price ↑ + Funding ↓
→ The move may be occurring without increasing long-position costs.
Price ↓ + Funding ↑
→ Longs may remain crowded despite falling price.
Key lesson: Funding is a positioning and market-structure metric—not a standalone trading signal.
October 3, 2026 69
