Traders betting against SKR paid extreme continuous fees to keep their positions open as funding rates held near minus 0.63 percent for ten straight minutes.
Imagine the token SKR is trading at around 0.027 dollars. A large wave of traders all decide at the exact same time that the price is heading lower, piling into bets that profit if the token falls.
Over a ten-minute span, the fee rate to hold these bearish bets plunged to nearly minus 0.64 percent every single minute. Even though the price stayed steady near 0.027 dollars, the pressure from sellers remained unusually intense.
In crypto derivatives, the funding rate is a regular balancing payment between buyers and sellers. When too many people bet on a drop, those sellers must pay a direct cash fee to buyers just to keep their positions open.
A negative rate this large repeating ten times in a row means short sellers are bleeding money fast. They are willing to pay a massive recurring penalty because they believe the price drop will be large enough to cover the high cost.
A deeply negative rate does not guarantee the token will crash, nor does it guarantee a sudden rally. If sellers run out of cash to pay fees, they may be forced to close their bets, which can push prices up, or sellers could prove right and push prices down.
Do not think a negative funding rate means an automatic price drop is locked in. Think of it as a market tilted heavily to one side, where holding the popular position is becoming rapidly more expensive by the minute.