Golden Funding: Extremely Negative Funding + Rising OI → Long on the Pullback

Setup Idea

This is the “pro bread-and-butter” setup: when funding goes deeply negative, the market shows a strong skew toward shorts — shorts pay longs at each funding settlement interval.

The key point: extremely negative funding does not guarantee a rally by itself. It becomes true squeeze fuel only when price stops falling and you get clear confirmation of strength.

About “−2% Every Hour”

On derivatives exchanges, the funding settlement frequency can be dynamic: at certain times and for certain instruments, the interval may change. Bybit states in an official announcement that when funding reaches +2% or −2%, the system may switch to hourly funding.
Also, Bybit documentation notes that different symbols can have different funding intervals, so the beginner rule is simple: check the interval directly on the platform before trading.

How to Use Premium Index Here (Without Confusion)

With negative funding, Premium Index is often negative too, but the number itself (< 0) isn’t the point — the direction is:

• Good squeeze scenario: Premium Index stops deteriorating and starts rising back toward 0
• Bad scenario: Premium Index goes deeper negative while price breaks supports — that’s not a squeeze, that’s a bearish regime

Formally, Bybit funding is derived from Premium Index + Interest Rate with clamps/limits, so Premium Index is the “raw input” to funding — but not a perfect mirror of it.

What You Need on TradingView

Timeframes:

• 1m / 5m

Indicators:

• VWAP
• EMA20
• EMA50
• Volume
• RSI 14

Data:

• Open Interest (OI)
• Premium Index
• Funding (from the exchange / widget)

Conditions (Checklist)

Required

• Funding is extremely negative
• OI is rising (leverage is being added; often shorts are building — “fuel”)
• Price is not collapsing: there’s a clear hold / stabilization around a key level
• Premium Index stabilizes or moves back toward 0 (the skew begins to unwind)

Hard No’s (Most Important for Beginners)

• Funding is negative, but price keeps printing lower lows and Premium Index keeps worsening → long is forbidden
• No pullback / no structure → don’t chase

How to Enter Manually (Correct Mechanics)

Entry only after proof — never by chasing.

1. Identify a key level: range boundary / prior low / “base” before the drop
2. Wait for at least one strength confirmation:
• Level reclaim (price returns above the level and holds)
• VWAP hold on a pullback
• A higher low forming on 1m/5m
3. Enter long on the pullback to VWAP/EMA20, only if it holds

Invalidation (When You Must Exit Manually)

• Price holds below VWAP and fails to reclaim it for 2–3 consecutive 1m candles
• Premium Index starts deteriorating again (deeper negative) while price is weak
• OI stops rising (fuel is gone) or a sharp OI Down begins

Take Profit

• TP1: +1% (close 60–80%)
• TP2: +2% (close the remainder)
  Alternative: a trailing approach — trail 2%, activation at +1%

Time Stop

Golden funding often resolves quickly. If there’s no real impulse within 30–90 minutes, exit — don’t turn it into a hold.

Common Beginner Mistakes

• Thinking negative funding means “it must pump”
• Buying while Premium Index keeps going deeper negative and price remains weak
• Entering without a pullback (worse price and stressful risk)

30-Second Quick Checklist

• Funding deeply negative ✅
• OI rising ✅
• Price holds a level / reclaim ✅
• Premium stabilizes or rises toward 0 ✅
• Entry on VWAP pullback ✅
  If any item is missing — skip the trade.

Execution Examples

1. #BEATUSDT

• Signals:

• Execution:

Important Note

This setup is designed to avoid “bag-holding.” It often appears near highs as a mechanism to punish shorts. A decision to cancel the long idea or flip to a short bias should be made when you see:

• Open Interest dropping,
• the index returning into a premium zone,
• funding weakening toward zero (or becoming less negative)

Where to Find These Screeners