Traders betting on PONS price gains paid rapidly escalating fees to keep their positions open as bullish sentiment congested the market.
Imagine PONS is trading near 37 cents. A massive wave of traders suddenly rushes in, placing bets that the token's price will rise.
Between 21:38 and 21:47 UTC, the price edged up from $0.375 to $0.379. At the same time, the hourly fee required to hold a bullish bet spiked from 0.0649% to over 0.0672%.
In derivatives markets, this recurring payment is called the funding rate. When most people want to bet on price increases, they must pay continuous fees directly to the traders taking the other side.
Ten consecutive alerts fired because the fee kept rising minute after minute. Bullish traders were so eager to hold their bets that they accepted increasingly expensive costs to stay in the trade.
A high fee rate does not mean the price must continue climbing. If buyers get exhausted by the ongoing costs, a wave of quick selling can trigger a sharp drop just as easily.
Do not think high funding guarantees price momentum. Think of it as a crowded room paying an entry fee that gets more expensive every minute.