Perpetual Contract Funding Rates Revealing Uncertain Future
The BitMEX Perpetual Contract Funding Rate is an important way to gauge whether the crowd on one of crypto's top exchanges, is getting overly greedy or fearful.
The metric is defined on our Santiment Academy as a fee paid by one side of the perpetual contract to the other. When the funding rate is positive, Longs pay Shorts. When the funding rate is negative, Shorts pay Longs.
So in essence, as traders, we're looking for high funding rates (greed) to be indicative of a potential upcoming top, and low funding rates to indicate a potential bottom (fear).