TER keeps going for 24 hours, down 6.64%, closing at 333.48. The drawdown itself isnโt small for Equities. Coupled with the funding rate, itโs been steadily stuck at 0.00000000 for a full dayโneither long nor short side has taken money from the other.
This creates a rare picture: price is clearly falling, yet the perpetual futures marketโs leveraged sentiment is as still as dead water. A zero funding rate means neither longs nor shorts at this price have their position costs increase further; in theory, itโs a vacuum zone with no crowding direction. Along with the position size change at 1445.78, Old Dog judges this isnโt a panic stampede where longs get slaughtered, but more like the spot market is driving a slow grind lower. The leveraged funds in the contract market havenโt reacted yetโor, in other words, theyโre just watching.
What the market overlooks is that with a zero funding rate, if the price keeps bleeding lower, the side without funding-cost protection will be hit first. Since the price is dropping, the side holding long contracts is clearly at a disadvantage: they canโt pay higher funding to prove theyโre crowded, and they also canโt avoid the mark-to-market losses caused by the price decline. With the funding rate like this now, it turns the question into a choice for shorts: do they keep pressing while longs are slowly being boiled, or do they worry this is a balanced point for a bull trap disguised as a sell-off?
The strongest counter-evidence is simple: a zero funding rate is often a sign of a turning point. If my assessment is wrong, that would mean the market isnโt just waitingโitโs building up energy. Once a catalyst factor appears (and here we have no announcement, so I wonโt invent one), the funding rate will instantly break away from the zero line and whip rapidly toward the crowded direction of longs or shorts, driving price sharply higher or into a violent plunge. This current dead-silent state of the zero funding rate itself is the biggest uncertainty. The second-order effect is that if price keeps falling but the funding rate stays pinned to zero, leveraged longs will face the situation of being cut with a dull knife: they continuously absorb price losses but donโt get a decent rebound to stop the bleeding. Eventually, this can trigger a wave of forced liquidationsโonly then will the funding rate be broken.
So Old Dogโs take is very clear: donโt touch it. At this level, going short risks falling into an inducement-to-sell trap because of the zero funding rate, and going long risks an endless grind lower. In terms of action, I choose to waitโwaiting for the funding rate, this most crucial thermometer, to start moving.
Trading tag:
#BinanceFutures #TradFi #USDโM
#TER #TERUSDT $TER