TrendiumWhat are funding rates?
Many crypto perpetual contracts use periodic funding payments between long and short positions. Under the common convention, positive funding means longs pay shorts, and negative funding means shorts pay longs. The rate and interval depend on the product and venue.
Funding is distinct from an exchange trading fee. Coinbase’s funding-rate explanation describes the mechanism. Consult the exact venue’s rules before interpreting a displayed rate; a sign or annualized figure alone may omit important details.
Funding is not open interest
A funding rate describes a payment mechanism. Open interest describes outstanding derivatives contracts. Neither number alone identifies the winning side of the next price move.
A market can have rising open interest without your knowing the funding rate, and a positive funding rate does not prove every newly opened position is long. Keep the units separate: a rate, a contract total and a price change are different measurements.
What does liquidation mean?
Liquidation is an exchange process used when a margined position no longer meets the required maintenance margin. Its details depend on the contract, collateral, price rules and margin system. It is not simply another name for a falling coin price.
A hypothetical trader’s account can face a margin problem while a broader trend reading still leans in the direction they expected. The general mechanism and its account consequences are covered in Coinbase’s liquidation explanation. The account terms remain the relevant source for an actual position.
An account example without a trading recommendation
Imagine two people viewing the same ETH market at the same moment. One is just observing it; another has a margined contract position. The market reading is shared context, but their account exposures differ. Collateral and contract terms determine the second person’s account risk.
The example is conceptual. It does not specify leverage, a position size or a liquidation threshold. Those cannot be inferred from a Trendium score or a screenshot of its risk panel.
What Trendium’s risk panel does and does not mean
Trendium compares directional warning signs with scores out of 100 and explanations. These are market readings, not your maintenance-margin ratio, funding cost or probability of liquidation. This guide does not imply that the app displays funding rates or liquidation maps.
Use the app for directional market context, and the venue’s own documentation for its contract and account rules. Trendium does not manage positions, place orders or supply financial advice. First learning the spot-versus-perpetual distinction helps keep those roles clear.