Lesson 3

Funding Rates: Detect Crowded Trades

11 min read

Use funding rate extremes to identify when the crowd is too one-sided — and position accordingly.

Key Takeaways from this Lesson

1Funding above +0.03% per 8h signals an over-crowded long — reduce exposure.
2Funding below -0.02% signals excessive fear — a potential contrarian buy zone.
3High funding rates are unsustainable; they incentivise the opposite trade.
4Never use funding alone — combine with OI and price action for context.

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