Funding rates are fees charged by cryptocurrency trading platforms to balance contract prices. These rates help align perpetual futures with the spot market. Altcoins may experience higher or lower funding levels, while Bitcoin maintains a neutral rate.
Traders use funding rates to manage leverage and risk, and shifts in rates reflect changes in demand for long or short positions. When rates rise, long positions may pay more; when rates fall, shorts may pay more. Understanding funding rate movements can help traders gauge market sentiment and potential price pressure on the contracts.
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