Over ten consecutive minutes, traders betting against SKR paid an increasingly steep fee to keep their positions open, highlighting intense and crowded selling pressure.
Imagine the token SKR is trading around $0.023. Suddenly, a large crowd of traders rushes in with bets that the token will drop in price, heavily outnumbering anyone betting on a rise.
Between 09:18 and 09:27 UTC, the penalty cost for holding these downward bets grew steeper every single minute, shifting from -0.0997% to -0.1083% as downward pressure mounted.
In derivative contracts, whenever sellers heavily outweigh buyers, sellers must pay cash directly to the buyers to keep the market balanced. This regular adjustment fee is known as the funding rate.
A fee deepening ten times in a row signals aggressive, persistent conviction. Sellers are willing to accept growing holding penalties just to maintain their downward positions.
A heavily negative rate does not guarantee the price will crash. If price starts rising even slightly, crowded sellers may rush to close positions at the same time, triggering a fast spike upward.
Do not think: everyone is selling, so the price must fall immediately. Think: one side of the boat is dangerously overcrowded and paying a premium to stay there.