Today the focus shifts to liquidity and leverage, which quietly control short-term price action.
Two things matter most right now:
Liquidity
Liquidity shows where large players are targeting stops and forced liquidations. Price moves toward areas of imbalance, not where retail expects it to go.
Funding Rates
Funding tells us who is crowded.
• Positive funding = longs paying shorts
• Negative funding = shorts paying longs
Crowded trades are vulnerable trades.
What this means:
• Extreme funding increases liquidation risk
• Flat funding = healthier conditions
• Liquidity gets taken before direction resumes
When liquidity is the driver:
• Moves are fast
• Reversals are violent
• Patience saves capital
Let liquidity clear before chasing price.