Crypto Funding Rates

How traders use funding

Funding is the cleanest read on positioning available in public data, because it is a price people are actually paying rather than a survey or a sentiment score. Three ways to use it:

• As a crowding gauge. A rate persistently three to five times the baseline means the long side is packed and paying dearly for the privilege. Those positions are expensive to hold, which makes them quick to close.
• As a cost of carry. If you intend to hold a leveraged position for weeks, the annualised number is a real drag on your return. At 0.05% per 8 hours you are paying about 55% a year before you are right or wrong about direction.
• As a divergence signal. Price making new highs while funding falls means the rally is being driven by spot buying rather than leverage — historically a healthier structure than the reverse.

How the numbers are calculated

Live rates come from Binance's premium index endpoint, which publishes the current predicted funding rate for every USDⓈ-M perpetual, plus mark price and index price. The annualised column is the straightforward conversion:

annualised % = 8h rate × 3 × 365

The history chart uses realised funding payments, not predictions — every settlement that actually occurred over the selected window. Green bars are intervals where longs paid shorts; red bars are intervals where shorts paid longs.

Things to watch for

• The rate you see is predicted, not settled. It drifts until the settlement moment.
• Caps differ by pair. Smaller pairs allow much larger funding swings than BTC or ETH, so a 0.3% reading on an illiquid alt is less remarkable than it looks.
• Not every venue settles on the same schedule. Most use 8 hours, but some pairs settle every 4 or even 1 hour during volatility, which changes the annualisation.