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Funding rates are a true reflection of market sentiment because they show which side is overcrowded. When funding remains highly positive, long traders dominate and pay shorts, increasing liquidation risk during pullbacks. This often appears near local market tops. When funding turns neutral or slightly negative while price holds support, it indicates leverage has been flushed without damaging structure—a healthy condition for trend continuation.
Current data shows mixed funding across exchanges, meaning no extreme leverage bias exists. This reduces the chance of sudden long or short squeezes and shifts price control back to spot demand rather than derivatives. The OI-weighted funding chart confirms risk is balanced, not euphoric. Markets usually build sustainable moves from such conditions, not from funding extremes.DYOR.#FundingRates