Funding: which part of the market pays for longs and which for shorts

What funding is

Perpetual futures never expire. To keep their price close to spot, the exchange regularly moves a payment from one side to the other.

Positive rate: longs pay shorts. It happens when more traders want to buy with leverage.
Negative rate: shorts pay longs. There are more leveraged sellers.

What it shows

Each coin falls into one of four groups by its current rate:

Group	Funding rate	What it means
Strongly negative (red)	below −0.01%	shorts pay noticeably
Negative (orange)	−0.01% to 0	shorts pay a little
Positive (light green)	0 to 0.01% inclusive	longs pay a little
Strongly positive (green)	above 0.01%	longs pay noticeably

The pane has four lines, one per group, on a 0 to 100% scale. Together the groups make up the whole market. You can change the line colours on the Style tab.

Funding pane with four lines under the hourly BTC chart — 1h, counted by number of coins. 1 Pane name and counting mode. 2 The red **Strongly negative** line: the share of coins where shorts pay noticeably. 3 The green **Strongly positive** line: the share where longs pay noticeably. Here it is close to zero, and most of the market sits in **Positive** (the light green line at the top).

How to add it

Open Chart. The coin doesn't matter, the data is the same for the whole market.
Click Add indicator → Funding.
On the Arguments tab, in the Weighting field, choose how to count the share:
- By count, by number of coins (default): every coin weighs the same;
- By OI, by Open Interest: a coin weighs as much as the money in its positions, so big coins count for more.
Click Apply.

1 The Weighting field: By count or By OI. 2 Apply adds the pane.

How it is calculated

The exchange settles funding every hour or less often. So on the 1h timeframe one candle is one settlement. On 1m, 5m and 15m the lines move in hourly steps. On 4h, 12h and 1d a candle shows the last settlement inside it.
Rates are taken as the exchange sets them, not rescaled to 8 hours. Coins with different payment intervals land in groups by their actual rate.

How to read it

Strongly positive is growing

More and more coins where longs overpay. The market leans toward leveraged buying. When there are a lot of these coins, the market is exposed to a cascade of long liquidations.

Strongly negative is growing

More and more coins where shorts pay noticeably. The market is set up for a drop. A sharp move up at that point can squeeze the shorts.

Negative and Positive dominate

Rates are near zero, no lean either way.

Count and OI disagree

Strongly positive is big by number of coins but small by OI? Mostly small coins are overpaying, while the big money is calm. And the other way round.

Common mistakes

Looking for one coin's rate. The indicator shows how the market is distributed, not the rate of a single coin.
Reading a lean as an entry signal. A funding lean can last a long time. Check it against price, Open Interest and the order book in BID / ASK.

Try it yourself

Add funding on any chart, 1h.
Over a month, find the moment when Strongly positive was largest. What did the market do next?
Switch the count to By OI and compare: same picture or a different one?

Not financial advice.