When we observe the funding rates of perpetual futures on the weekly chart, we can identify that the current moment of pessimism among derivatives traders has only occurred 6 times since November 2022.
When these rates are predominantly negative on a weekly basis, it signals that there is a greater demand for sell orders in futures contracts.
However, it is worth noting that all previous similar moments were periods where the selling force reached local exhaustion, establishing bottoms with significant returns in the following weeks.
Note that this does not guarantee that the price cannot vary below these levels, but it signals that by this metric, the price region with negative rates tends to be allocation opportunity zones.
Written by caueconomy
