Crypto funding rate spikes: now vs the 7-day average

Is a funding rate of 30% a year high? On one market it's an ordinary week. On another it's the highest in a month. The rate on its own doesn't say which. Put it beside the same market's average over the last 7 days and it does: funding far above its week is a spike, and far below it a drop. The perpetuals index shows the two side by side for every coin and every exchange you have on, with the biggest gaps in colour.

What is the 7-day average funding rate?

Funding is the payment between longs and shorts that keeps a perpetual's price near the coin's spot price. Exchanges pay it every hour, every 8 hours or continuously, so the site turns every rate into a rate a year, which reads the same whatever the schedule (how, and why).

The 7-day average takes every payment an exchange made on a market over the last week and averages them over the hours they were for. It's what holding a position there has actually cost, or paid, lately: the market's normal. A single reading can be pushed around by an hour of busy trading. A week of them is much steadier.

Why compare funding now with its 7-day average?

Funding moves with positioning. When traders pile into longs, the perpetual trades above the coin's price and the rate rises until holding a long costs enough to slow them down. When longs rush out, or shorts pile in, it falls, and below zero shorts pay longs. So the gap between the rate now and its week says how much has changed, and which way, in terms that mean the same on every market:

Example figures, not market data. The rates are a year, and the gap is in percentage points. A is having an ordinary day. On B, longs are paying more than five times their usual rate: a spike. On C, funding has turned negative, so the shorts, who were paid all week, are now the side that pays (negative funding rates).

Now picture a market that has paid 42% all week. Its rate now is the same as B's, and there's nothing unusual about it. That's what the average adds.

How to read it on the perpetuals index

1. Open the perpetuals index and, next to Funding above the table, choose 7-day avg. Each exchange's cell shows its 7-day average for that coin.
2. Tick Δ to current funding, beside Market Cap & 24h chart. Each average now has funding now beside it, and the gap: a cell reading +8.0% ▲ +42.0% (+34.0) says the week averaged 8.0% a year, funding is at 42.0% now, ▲ above the average, 34.0 points higher.
3. Look for colour. A gap of 10 points a year or more is drawn in the up colour when funding is above its average, and the down colour when it's below. Smaller gaps stay grey, so the big ones stand out among hundreds of cells. The arrow and the gap's sign say the same without the colour, and the colours follow your choice in Settings.
4. Hover a cell for its figures to a hundredth, and for when its average starts if the exchange has listed the market for less than a week.

A dash means there's no average to show: the exchange publishes no funding history a browser can read, or it didn't load. A dot means it's on its way. The averages are fetched for the rows on screen, as you scroll.

What a big gap can mean

• A crowded side. Funding far above its average usually means longs have piled in faster than shorts, often after a sharp move up such as a short squeeze. Far below it means the reverse, or longs leaving in a hurry.
• A bigger running cost than you planned for. If you hold a long on B, the week's 8% was your cost. At 42% you're paying more than five times as much for every hour it lasts, and the rate now is what you'll pay next.
• A difference between exchanges. A spike on one exchange and not on the others widens the funding spread, the difference between the cheapest and the dearest place to hold a position, which is what the funding spread trade collects. The cells side by side show which exchange it's on.
• A rate far from its normal. Funding tends to drift back toward its usual level once the rush that pushed it out is over, which is why some traders watch for big gaps. Tends to, not has to: a crowded side can stay crowded for days.

What the gap leaves out

• Funding now can still change. For most exchanges it's the rate their next payment will be charged at, worked out as they go, so the payment can come out different.
• A week is a short history. A market listed a few days ago averages over the days it has. To see the whole shape, each coin's perpetuals page charts the payments over 7 or 30 days, exchange by exchange, under Funding history (how to read it).
• The rate isn't the money. A big gap on a market with little open interest moves little money. Funding flow says how much changes hands an hour, and open interest how much is held open.
• It isn't a forecast. The gap says how today compares with the week, not what comes next.

Not financial advice. Rates move while you read them.