Setup Idea
This setup is a logical continuation of the Golden Funding trade, but on the short side.
When funding has been extremely negative for a prolonged period (for example −2% or lower, with a 1-hour funding interval), the market squeezes shorts aggressively. This phase is driven by forced buying and accelerated upside.
However, this regime does not last forever.
At some point, funding normalizes (returns toward neutral), the premium index stops expanding, and price near the highs begins to distribute. This is often where the market transitions from a long-dominated regime into a phase of short accumulation.
Key principle:
We do not short during golden funding.
We short after golden funding stops working.
What You Need on chart
Timeframes
- 1m — entry
- 5m — structure
- 15m — context (important to understand positioning near highs)
Indicators
- VWAP
- Volume
- RSI14
Data
- Open Interest (OI)
- Premium Index
- Funding (from the exchange or widget, including funding frequency, e.g. 1 hour)
Conditions (Checklist)
Required
- There was a prior phase of extremely negative funding (golden funding, −1.5% / −2% or lower, with frequent funding payments)
- Funding has normalized (moved toward 0 or into moderate values)
- Price is at or near highs, or after a strong upside impulse
- Open Interest starts increasing during a pullback or consolidation (new positions are being added)
- Premium Index stops accelerating upward and stabilizes
Hard No (Critical Filters)
- Funding is still deeply negative and actively charging → short is forbidden
- Premium Index continues expanding upward → squeeze regime is still active
- Price is moving straight up without pauses → no structure to lean against
Optional (Improves Quality)
- RSI14 was overbought and starts rolling over
- Volume fades on pushes higher (distribution signal)
- Price fails to hold VWAP from above or gets rejected on a retest
Manual Entry Logic
Rule for beginners: short only after regime transition is confirmed.
- Mark the high / resistance area formed after the golden funding phase
- Wait for early weakness: a local lower high on 1m / 5m, or a break of micro support after the upside move
- Wait for a pullback: into VWAP, or into a local level
- Enter short: on rejection from the level with confirmation that upside continuation fails
❌ Shorting “because it feels high” is not allowed.
Invalidation (When the Setup Is Broken)
- Price makes a new high and continues upward
- Premium Index starts accelerating upward again
- Funding turns deeply negative again (squeeze regime returns)
- Price reclaims and holds above VWAP (2–3 consecutive 1m closes)
Take-Profit (Short-Term Model)
- TP1: +1% (close 60–80%)
- TP2: +2% (close remainder)
Alternative:
- single TP at +1.5%
Time Stop
If there is no meaningful downside movement within 30–60 minutes, exit the trade.
This is a regime-shift trade, not a position to sit through.
Role of Funding (Critical)
This is the main trap of the setup.
OK for Shorts
- Funding near zero
- Slightly positive funding (longs pay shorts)
- Neutral funding with OI rising near highs
Forbidden
- Funding turns deeply negative again
- Funding is charged frequently (e.g. every hour)
- Premium Index rises together with price
In these conditions, the market regains fuel against your short.
Common Beginner Mistakes
- Shorting during golden funding
- Ignoring funding and premium dynamics
- Shorting without structure (“it’s already high”)
- Holding through a renewed squeeze regime
30-Second Quick Checklist
- Golden funding already happened and ended ✅
- Funding normalized ✅
- Price at highs / post-impulse ✅
- OI rising during pullback or range ✅
- Premium stable or declining ✅
- Entry on pullback, not in impulse ✅
If any item is missing — skip the trade.
Screener Settings
- Funding filter: assets where funding transitioned from extreme to neutral
- OI Up (600s)
- Liquidity filter (exclude thin markets)
- Premium Index displayed next to price
Crypto Screeners allow you to quickly detect regime shifts: when golden funding stops working, premium stabilizes, and the market begins building new positions. This is where clean short-side asymmetry appears.