#数字货币市场洞察 Let’s talk about funding rates in perpetual contracts—this is actually more useful than many people think.

Simply put, the funding rate is a fee exchanged between longs and shorts to keep the contract price in line with the spot price. A positive rate means longs are paying, indicating more bullish sentiment in the market; a negative rate means shorts are paying, showing stronger bearish sentiment.

But its beauty lies in the three things it reveals: first, the direction of market sentiment—positive or negative is clear at a glance; second, how crowded the positions are—extreme rates often mean one side is overcrowded; third, how far the contract price has deviated from the spot—high positive rates mean the contract is trading at a premium, deep negative rates mean it’s at a discount.

How to use this in practice? Don’t rush to go long when the funding rate is highly positive, and don’t get too greedy with shorts when it’s highly negative. The key is to look at the funding rate together with open interest (OI) for a more accurate judgment.

Ultimately, the funding rate isn’t a fortune-telling tool; it’s a key signal for reading market sentiment and crowding. The same logic applies to $BTC.