Annualized Funding Rate vs Crowded Short

The funding rate per settlement period expressed as an annual percentage; calculated as rate per period × settlements per day × 365; used to compare funding cost across different assets and time periods; above 30% annualized indicates crowded long conditions; below -15% indicates crowded short conditions.

A market condition in which an excessive proportion of leveraged participants are positioned short, typically indicated by a long/short ratio below 0.7 and negative funding; associated with elevated short squeeze risk as shorts face mounting carry costs on positions that are not being rewarded.