Traders betting against SKR paid an unusually steep ongoing fee to keep their positions open, signaling an intensely crowded wave of short sellers over a ten-minute span.
Imagine SKR is trading at around $0.0224. A huge rush of traders arrives wanting to bet that the price will fall, creating a massive imbalance against those betting the price will rise.
Across ten straight minutes, an automatic balancing fee dropped to an extreme low of -0.0585% before slightly easing to -0.0559%. This alert triggered every single minute without stopping.
This mechanism is called the funding rate. In perpetual markets, when too many people bet downward (shorts), they must pay a recurring cash fee directly to the traders betting upward (longs) to balance the market.
A single alert could be a momentary spike, but ten consecutive alerts show that downward bets remained heavily crowded. Sellers were willing to bleed continuous fees just to stay in their positions.
Deep negative funding does not guarantee a crash or a rally. Heavy selling could push the price lower, or a sudden price uptick could force costly short positions to close in a rapid rebound.
Do not think, sellers are paying a fee, so the price must fall immediately. Think, short sellers are so crowded that holding their bets is actively costing them money every hour.