What Are the Risks Associated with High Funding Rates?

High funding rates can be a risk for traders who are long on a perpetual contract. This is because they will have to pay the funding rate to the shorts.

If the funding rate is high, it can eat into their profits or even cause them to lose money. High funding rates can also be a sign of a bubble in the market.

If the funding rate is consistently high, it may be a sign that the market is overbought and due for a correction.