What does negative funding rate mean in crypto?

A negative funding rate means short holders are paying long holders on a perpetual future — the market is crowded short. Sustained negative funding while price holds is a classic short-squeeze setup.

Why it happens

More traders are short than long, so shorts pay to keep the perp tethered to spot.

What to watch

Negative funding + price refusing to fall + rising OI = trapped shorts.

Read live order flow on EnsoTrade →

FAQ

Is negative funding bullish?

Often, yes — it means shorts are crowded, and crowded shorts fuel squeezes when price rises.

Related