SKR short sellers consistently paid an unusually high fee of roughly 0.30% to keep their positions open over ten minutes, signaling extreme bearish crowding.
Imagine SKR is trading at around $0.029. An overwhelming crowd of traders rushes in to bet that the price will drop even lower.
Because so many traders were betting on a decline, they were forced to pay a recurring penalty fee of nearly 0.30% every single hour just to hold their positions.
In crypto derivatives, the funding rate is a regular payment between buyers and sellers to keep contract prices balanced. When it turns deeply negative, sellers must pay buyers.
This was not a brief one-second spike. The funding rate stayed pegged near minus 0.30% for ten consecutive minutes, showing stubborn, sustained pressure from sellers despite the ongoing cost.
Heavy shorting does not guarantee the price will fall. If the price ticks up even slightly, trapped sellers might rush to exit at the same time, triggering a sharp rally known as a short squeeze.
Do not think heavy shorting means an easy drop is coming. Think of a crowded room where sellers are paying a premium to stay inside, making any sudden exit volatile.