{"slug":"negative-funding","term":"Negative Funding","category":"Derivatives","definition":"Negative funding is a perpetual funding rate below zero: the perp trades under spot, and shorts pay longs to hold. It means the short side is crowded or hedgers dominate. Deeply negative funding into support is the setup where the market pays you to be long, and where short squeezes start.","street":"When shorts are paying to stay short, someone is very sure and very crowded. The market loves to charge that certainty.","depth":["The rate goes negative when the perp price sits below the index — more sellers than buyers on the contract than in spot. Mild negatives around −0.01% per 8 hours are noise; −0.05% and beyond, sustained, is a crowded short. On a 1-hour funding pair the same number is ten times as expensive to hold, so check the interval. Our funding monitor lists the most negative pairs with their real interval, and the positioning board shows whether the crowd is short too.","The pattern: negative funding, a crowd past 60% short, and price holding a level that should have broken by now. That is a squeeze being wound — every short is paying rent and every stop sits just above. It does not tell you when; it tells you the fuel is loaded and the direction of the eventual violence. Being short there is joining the crowded side at the worst price."],"live":{"label":"Most negative funding right now","href":"/funding/negative"},"related":["funding-rate","funding-interval","long-short-ratio","liquidation-cascade","basis"]}