SKR saw an intense wave of downward bets, pushing the funding rate to roughly -0.13% per hour as short sellers paid hefty fees to keep their positions open.
Imagine SKR is trading at roughly $0.0225. Suddenly, a large crowd of traders rushes in, all wanting to bet that SKR will drop.
Over ten straight minutes, downward bets overwhelmingly outnumbered upward bets. This sustained imbalance triggered an unusually steep fee of around -0.13% per hour on the asset.
This rebalancing mechanism is called the funding rate. When funding turns negative, traders betting on a decline must pay periodic cash payments directly to traders betting on an increase.
A single minute of negative funding can be a random blip. Ten alerts in a row show strong, persistent pressure from sellers who are willing to bleed cash fees just to maintain their short trades.
A negative funding rate does not guarantee the price will fall. If SKR ticks upward even slightly, short sellers paying high fees may panic and close their bets at once, driving price sharply higher.
Do not think negative funding means the price is guaranteed to crash. Think of it as a crowded room where everyone is leaning in the same direction, making the market vulnerable to sharp moves either way.