How Does a High Positive Funding Rate Affect Market Sentiment?

A high positive funding rate generally reflects a strong, often aggressive, bullish sentiment in the market. It indicates that the demand for long positions is significantly outpacing the demand for short positions, causing the perpetual contract to trade at a high premium.

However, a very high rate can also signal a crowded trade and potentially a short-term reversal as longs are incentivized to close positions.