Funding Rate Patterns and Trading Signals
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Funding Rate Patterns and Trading Signals
Introduction
Funding rates are a key mechanism in perpetual futures contracts on cryptocurrency exchanges like Binance, Bybit, and OKX. They ensure that the perpetual contract price stays aligned with the spot price by periodically transferring payments between long and short positions. Positive funding rates mean longs pay shorts, signaling overcrowding on the long side.
⚠️ Disclaimer: This article is for educational and informational purposes only. It does not constitute financial advice or an investment recommendation. Cryptocurrency trading involves significant risks, including the loss of your invested capital. Always do your own research (DYOR) and consult a financial advisor before making investment decisions.
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