excellent quality in summary.

"As long as the funding rate is high and negative → DO NOT enter short.
They will liquidate you mercilessly. 🚫💀
Why does this happen? Quick and clear explanation:
When the funding rate is negative → shorts pay longs (every 8 hours normally).
If it is very negative/highly negative (e.g., -0.05%, -0.1% or more), it means there are too many shorts in the market. Everyone is betting downwards, the price of perpetual futures is well below the spot → extreme bearish panic.
In this situation:
Longs (those who are long) receive constant money from shorts.
This encourages more people to go long (because they are paid for holding it).
The price starts to rise gradually (or suddenly) to attract more longs and balance.
When the price rises → highly leveraged shorts get liquidated in cascade → brutal short squeeze.
Each liquidation forces more buying → price rises faster → more liquidations → and thus it sweeps you if you're short.
Brutal summary:
High + negative funding rate = market overloaded with shorts → likely rebound/squeeze → shorts pay funding + get liquidated due to rising prices.
Advice:
Wait for the funding to become less negative (or turn positive) before going short.
First, the weak longs get cleaned out (when funding is high and positive), then the prices really fall.
Patience = survival in futures. 🪑☕
What do you think? Have you seen epic squeezes due to extreme negative funding? 🔥"