To be honest, I’ve long since stopped understanding the logic behind this funding rate volatility. A lot of people are still out there analyzing market behavior and technical indicators, claiming that the price difference between spot and futures determines the funding rate—I just don’t buy it.

If you look closely, you’ll see that no matter whether the spot price is higher or lower than the futures, the funding rate can still end up negative. What’s even more ridiculous is when someone tries to explain it by saying “there are more short positions, so the funding rate is negative”—that doesn’t hold up at all. I’ve personally seen situations where long positions clearly dominate, but the funding rate is still negative.

So how is this funding mechanism actually calculated? Honestly, it’s just a black box. The platform sets it however they want, and the market makers can adjust it as they please. All those theories about price spreads and position ratios sound professional, but in practice, they don’t line up at all.

With such an opaque mechanism, it’s always retail investors who get hurt. You think you’ve figured out a pattern, only to realize that there’s no pattern at all.