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Measures the aggregate funding rates for the asset across leading global exchanges.
Crypto funding rates act as a real-time gauge of market positioning extremes. When funding rates reach elevated positive levels (longs paying shorts), this signals overcrowded bullish positioning - a classic contrarian indicator. The mechanism becomes self-reinforcing as:
Perpetual futures markets amplify volatility through their embedded leverage (often 10-100x). Elevated funding rates correlate with:
Funding rate data is sourced from leading crypto derivatives exchanges (e.g., Binance, OKX) through their published perpetual futures contract metrics. Aggregation involves weighting by open interest to reflect market-wide sentiment. The normalized index compares current rates to historical averages, flagging deviations from typical market conditions.
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| Benchmark (Litecoin) | Strategy | |
|---|---|---|
-88.8% | -64.7% | |
87% | 54.7% | |
0.58 | 0.49 | |
13.3% | 12.8% | |
0.00 | -0.01 | |
1.00 | 0.54 |
Predictive factors are designed to be translated into simple long-only strategy, with simulated past performance:
The strategy is rebalanced daily, on a continuous basis. There are 0.5% transaction costs applied on each position adjustment.
Get started by replicating the historical performance with our code snippets.