Perpetual funding rate
The fee paid between long and short holders of a perpetual futures contract, settled every 8 hours. Negative funding = shorts paying longs (bearish positioning, often a contrarian buy signal). Heavily positive funding = longs paying shorts (euphoric leverage, often a sell signal).
How to read it
Funding is the crowd's leverage talking. Positive funding means longs pay shorts to keep their positions, so the leveraged crowd is bullish. Heavily positive funding is euphoria on margin, fragile and prone to long squeezes. Negative funding means shorts pay longs, fear on margin, and short squeezes fuel sharp rallies. The baseline is around +0.01% per 8 hours; deviations from that, not the sign alone, carry the signal.
On Galaxy Mind
Funding carries 12% of the Buying Gauge, read live from the OKX BTC-USDT perpetual. The gauge scores it contrarian: negative funding pushes the score up, frothy funding drags it down. The cockpit card shows the raw 8-hour rate next to its normalized contribution.
Context
The deepest negative funding prints cluster around capitulation lows, March 2020 being the canonical example, when shorts paid extraordinary rates and the market ripped upward off the bottom. Persistent high funding preceded both the May 2021 and November 2021 drawdowns. Of the gauge's ten signals this is the fastest-moving, and the first to flip when sentiment turns.