These days, I’ve seen trading volumes with funding rates soaring to ridiculous levels, and I only see two options: either grit my teeth and go against the market, or simply avoid the volatility. Honestly, I prefer the latter now… When the rates are extreme, whether the direction is right or not doesn’t matter that much; once the sentiment flips, a retracement can teach you a quick lesson.

I usually start by sneakily checking if the net fund flow and active addresses are keeping up. If they’re not and the rates are still skyrocketing, it’s probably just some “squeeze” creating the hype; if the distribution of costs also shows dense stacking above, I’m even less inclined to be the hero. You can trade against the market, but your position should be small enough not to hurt, and you should slowly endure it—don’t expect to eat it all in one bite.

By the way, recently some new chains/Layer 2 solutions are incentivizing to boost TVL, and veteran users complain about “mining, then selling,” which I think is quite true: the short-term data looks good, but funds move out just as fast. Anyway, I’m going to pull my hands back first and consider again when the rates return to normal ranges—no need to compete with the market’s emotions.