Traders betting against SKR paid steep recurring fees to keep their positions open as funding rates stayed deeply negative for ten consecutive minutes.
Imagine SKR is trading at around $0.023. A massive wave of traders rushes in to bet that the price will drop, completely outnumbering the traders betting on a rise.
Because so many traders were betting downward at once, the cost to hold those positions turned deeply negative, dipping past -0.67% and staying there across ten minutes of repeated alerts.
Crypto contracts use a regular cash transfer called a funding rate to keep trading prices aligned with spot prices. When the rate is deeply negative, traders betting down must pay cash directly to traders betting up.
A single spike can be brief noise, but ten consecutive minutes of steep negative rates shows persistent, heavy demand to short SKR even when it costs a fortune to hold the trade.
Extreme negative funding does not mean SKR is guaranteed to plunge. In fact, if the price ticks slightly upward, crowded short sellers may be forced to buy back quickly, sparking a sudden sharp bounce.
Do not think a negative funding rate guarantees a price crash. Think of it as a crowded room where sellers are paying heavy rent just to stay inside.