Altcoin funding rate has hit a 9-month high, pushing most altcoins to the edge of liquidation in the current low liquidity market...
In the current market context, long liquidations could be triggered, keeping investors on the edgehave significantly outperformed Bitcoin, with Hedera alone posting an impressive 500%+ surge. While the current altcoin rally is significant, caution is necessary.
This is important since historical data revealed that rapid price surges and rising funding rates often precede corrections. For example, after a similar surge in January, a 15% correction followed. Investors should remain cautious as corrections could occur, especially if broader market conditions or investor sentiments shift.The 30-day funding rate for perpetual futures surged, with bulls paying 4% to 6% per month to maintain leveraged positions, according to CoinGlass data.While manageable during strong uptrends, these costs can quickly erode margins if prices stagnate or decline. Even experienced traders can only tolerate these high fees for so long.
However, the attached chart revealed that while current funding rates for ADA and XRP stand out compared to the last six months, they remain below their 12-month highs. If history is taken into account, this would suggest that these altcoins may still have room for additional leverage-driven growth.Combined with their funding rates, this momentum could prompt some to pull back, while others may seize the opportunity to capitalize on the ongoing bull run.
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