Noticing how the market reacts to different price levels, I realized that many traders overlook one critical indicator — funding. This is actually a very important mechanism that shows the imbalance between longs and shorts.

Funding is essentially a fee for holding positions in futures. When more traders go long, the funding rate becomes positive, and longs pay shorts. Conversely, if more traders are short, the fee goes from shorts to longs. The system automatically tries to balance the market.

Of course, this fee is charged every 8 hours, meaning 3 times a day. When I analyze charts, I always look at this indicator — it often signals overbought or oversold conditions in one direction.

Here's an interesting pattern: when funding is very high (and people are actively shorting), it often means the crowd is confident in a decline. But as practice shows, the crowd is usually wrong. When everyone is on the same side, the price often moves in the opposite direction. So, when choosing an entry point, be sure to consider funding as an important indicator.

Remember, funding is not a magic crystal ball, but it’s very useful information for understanding market sentiment. Use it as part of your analysis, and you'll better understand when the market is overheated.