Is the market over-borrowed?

Why it's here, free

How to read it

• Below 0% · Fear. Short sellers are paying buyers: more traders are betting on a fall.
• 0% to about 11% · Calm. At or below the exchange's default rate (0.01% every 8 hours, about 11% a year). No unusual borrowing to bet on a rise.
• About 11% to 40% · Warm. Buyers are paying more than usual to keep borrowed long positions. The crowd is leaning one way.
• Above 40% · Crowded. A lot of borrowed money is betting on prices rising. If prices drop sharply, exchanges close those positions automatically (liquidations), and that selling can make the fall faster.

What it measures

Perpetual futures have no expiry date, so exchanges keep their price close to the coin's real price with funding: every few hours, traders on one side pay traders on the other. When more traders hold borrowed bets on a rise, buyers pay sellers, and the rate goes up.

The gauge is the average funding rate across Bybit's 30 most-traded USDT perpetual contracts (by trading volume over the last 24 hours). It's read many times through each day, and each day's figure is the average of that day's readings. One figure per finished UTC day, shown as a yearly rate so it's easy to compare.

What it can't do

• It isn't a timing signal. A crowded market can stay crowded and keep rising for weeks. Use it to decide how much risk to take, not when to buy or sell.
• It's an average. One coin can pay far more, or far less, than the market as a whole.
• It describes finished days. Each figure is a whole day's average, added after that day ends, not a live reading.

Pair it with the liquidation price calculator (how small a move ends your trade) and the leverage risk check (what one bad day costs your account). New to all this? The Drawdown Playbook is free.

For information only, not financial advice. Data: Bybit public market data. Cryptoassets are highly volatile and you can lose all of your money; leveraged trading can lose you all of your margin very quickly.