Collated Funding Rates is a Crypto Specific Indicator that pulls Exchange Funding Rate Data from several exchanges for both Bitcoin and Ethereum. By combining both the Funding Data for Bitcoin and Ethereum across several exchanges, a Trader can see the Collated Funding Rates from several Crypto Exchanges.
What are Funding Rates?
Funding rates are periodic payments either to traders that are long or short based on the difference between perpetual contract markets and spot prices. Therefore, depending on open positions, traders will either pay or receive funding. Crypto funding rates prevent lasting divergence in the price of both markets These Funding Rates also incentivize Liquidity Providers to take certain positions whether Long or Short based on the Funding Rate.
What are Liquidity Providers?
A Liquidity Provider, also known as a Market Maker, is someone who provides their crypto assets to a platform to help with the decentralization of trading. In return, they are rewarded with fees generated by trades on that platform, which can be thought of as a form of passive income.
How to use Collated Funding Rates:
When the Funding Rate is positive, the price of the perpetual contract is usually higher than the market price. Thus, traders who are long pay for short positions. Conversely, a negative Funding Rate means that short positions pay for longs.
As the funding rate increases from negative to positive Traders and Liquidity Providers are incentivized to take short positions. This can be seen on the indicator as it moves from down to up and changes from red to green. As the funding rate decreases from positive to negative Traders and Liquidity Providers are incentivized to take long positions. This can be seen on the indicator as it moves from up to down and changes from green to red.
Funding Rates are used by Exchanges to manipulate the price. Because of this fact, Collated Funding Rates can show trend changes based on when a specific up or down move in Price is incentivized by Exchange Funding Rates.
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Update Changelog: -Red and Green colors have been inverted as default. Negative funding which was Red is now Green because negative funding is Bullish. Positive funding which was Green is now Red because positive funding is Bearish -Reversal line update to show the leading edge of the funding -Option to invert the scale -Option to invert the colors -Added funding rates for Bitget
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Color Update
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Reversal Line Inverted Setting Fix
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- Name change in indicator - Alert functions for positive or negative funding rates from .05 to -.05
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-Removed FTX Funding options
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-Hotfix for Bybit Data
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- Hotfix for updated Bitmex data
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Hotfix for Sensitivity values
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- Tickers from exchanges updated to improve accuracy