Funding rate, explained

Signal

Positive / negative

who pays whom, longs vs shorts

Settles

~8h

paid periodically, not continuously

Weighting

Open interest

bigger exchanges count for more

Source

CoinGlass

weighted by how big each exchange is

A periodic payment exchanged directly between long and short traders on a perpetual futures contract — nothing changes hands with the exchange itself. It exists because perpetuals, unlike traditional futures, never expire and have no delivery date. With no expiry to force the contract price back toward spot, funding is the mechanism exchanges use instead: whichever side is pushing the contract away from spot pays the other side to pull it back.

Funding typically changes hands every ~8 hours. Our chart lets you switch the display between 1-hour, 4-hour, 8-hour, daily and weekly steps — that changes how much detail you see and how far back the history reaches. It does not change how often the exchanges themselves settle up.

When more traders want to be long than short, demand pushes the perpetual's price above spot. Funding responds by charging the side that's crowding the trade — longs — and paying it to shorts, which makes holding a long marginally more expensive and holding a short marginally more rewarding. That pressure nudges the contract price back toward spot.

The reverse happens when the perpetual trades below spot: shorts are the crowded side, funding turns negative, and shorts pay longs instead. The sign of the rate is a direct readout of which side the market is leaning.

We use the open-interest-weighted funding rate from CoinGlass — a blend across exchanges in which the venues carrying the most open positions count for the most, which makes it the single most representative number. We line it up against the asset's price from CoinGecko so you can read funding pressure alongside price action on the same chart.

Nothing is layered on top of it — no score, no ranking against history, no adjustment of our own. What you're looking at is the funding rate itself, exactly as CoinGlass computes it.

Its sign has reliably told you which side of the market was paying, but reading a single stretched value as an automatic reversal signal is where it goes wrong. Funding can sit at an extreme for weeks during a strong trend without anything unwinding.

Many of our indicators get a 0–100 layer on top of the raw data — a ranking against their own history, a fitted band, a weight inside a composite score. Funding rate deliberately doesn't. It's a live positioning signal that can flip from positive to negative within hours, not a slow-moving measure with a settled historical range to rank today against. A 0–100 score would imply fixed thresholds that the market itself does not have.

Instead, we show the raw open-interest-weighted rate on the main chart and pair it with a per-exchange breakdown underneath — current rate, what that works out to over a year, how often each venue pays out and when it next does — plus summary boxes for the average, highest, lowest and the spread between them. Reading that spread is often more useful than reading the blended number alone: a wide gap between the highest and lowest venue can flag short-lived dislocations, or a chance to buy on one exchange and sell on another, that a single blended figure smooths over.

Funding tells you which side of the market is crowded. It doesn't tell you when the crowd breaks.

Watch the sign, then the size. A positive reading means longs are paying — the crowd is leaning long, and the higher and more sustained the rate, the more borrowed money is stacked on that side. A negative reading is the mirror image, and often shows up during sharp sell-offs as shorts pile in.

A sign flip is worth noting, especially after a long one-sided stretch — it means sentiment is actively changing hands, not just easing off an extreme.

Pair it with open interest. Stretched positive funding while open interest is climbing is the setup worth watching: borrowed money building on one side, which is what makes the eventual unwind violent when it comes. Funding alone only tells you which side is crowded, not how much money is actually at stake.

Funding rate is a derivatives-positioning indicator — it answers who's crowded in the leveraged futures market, not whether the asset itself is cheap or expensive. It sits alongside open interest and liquidations as one of three analytics charts that read the futures market directly, rather than price or on-chain behavior.

It is not one of the fourteen weighted inputs in either the Bitcoin or Ethereum Heat Meter composite. Those two build a single 0–100 cycle score out of valuation, timing, mining economics, holder behaviour, macro and sentiment indicators, all of which move slowly. Funding rate moves in hours, and that speed is the point — which is why it stands as its own chart rather than feeding a score built for the long view.

Others in market structure — How much borrowed money is in the market, which way bets are leaning, and where money is moving.

• Open InterestHow much leverage is outstanding across futures venues, and which exchanges hold it.
• LiquidationsWhere leveraged positions were forcibly closed, long against short.
• Altcoin Season IndexCoinGlass’s published 0–100 rotation index, with 80 and above marking Altcoin Season and 20 and below Bitcoin Season.
• Altcoin Strength IndexA weekly 0–100 score for altcoins against Bitcoin, where 0 means historically cheap and 100 historically expensive.
• Bull Market ProgressHow far roughly thirty cycle-peak indicators have travelled toward their historical top readings.

Every indicator we track — the full glossary.