SAND recorded three back-to-back negative funding rate alerts within two minutes as traders betting on price drops paid a growing premium to hold their positions.
Imagine SAND is trading at around four cents. Suddenly, a large wave of traders enters the market betting that the price is about to drop even lower.
Between 6:10 AM and 6:12 AM UTC, three consecutive alerts triggered as the cost to hold downward bets deepened from minus 0.0501 percent to minus 0.0504 percent.
Between 6:10 AM and 6:12 AM UTC, three consecutive alerts triggered as the cost to hold downward bets deepened from minus 0.0501 percent to minus 0.0504 percent while the price sat near $0.0389.
Crypto derivative markets use a balancing fee called the funding rate. When too many people bet downward, those traders must regularly pay cash directly to the buyers holding the opposite side.
A single alert could be a momentary glitch. Seeing three rapid alerts showing negative funding means sellers are aggressively piling on, willing to accept continuous fees just to stay in the trade.