Bitcoin Funding Rates — Perpetual Futures Sentiment Signal
Funding rates on Bitcoin perpetual futures reveal the positioning bias of leveraged traders. Deeply negative funding means shorts are paying longs — signaling maximum pessimism and leveraged short exposure that often precedes short squeezes and bottoms.
The 8-hour rate paid between long and short perpetual futures positions, averaged over 14 days. Positive = longs paying shorts (bull market leverage); Negative = shorts paying longs (bear market capitulation).
Average of Binance BTCUSDT perpetual funding rate, taken every 8 hours, smoothed with a 14-day moving average to reduce noise from individual funding intervals.
Deeply negative 14d MA of funding rates (below −0.01% per 8 hours) — shorts are paying premium to maintain positions, signaling extreme pessimism. Short squeezes from these levels have been violent.
Jun 2022 LUNA: extremely negative funding | Nov 2022 FTX: deeply negative for sustained period before recovery
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Not financial advice. Bitcoin is a high-risk asset. Past signal accuracy does not guarantee future results.