Lately, I've been watching the market and noticed that the funding rates are starting to become extreme again. Honestly, I feel quite conflicted: if I take the opposite side, theoretically, I'm "eating" the sentiment tax on that side, but I never know if the next spike will wipe me out completely; if I hide from the volatility, I always feel like I'm being cowardly and missing out on a seemingly "certain" trend.

Right now, I prefer not to rush into taking sides. First, let's break down the trading process: who is chasing gains and selling off, who is providing liquidity, and whether there are obvious forced liquidations on-chain. Extreme rates are often not about money being handed over; they are a warning that "crowding levels are off the charts." At this point, trying to hedge against it head-on is almost the same as actively catching a falling knife.

Recently, people also like to compare RWA, US Treasury yields, and on-chain yield products. Frankly, I treat it as a reference: the more someone talks about "stability" and "quasi-sovereign bonds," the more I want to see who is actually subsidizing the underlying assets and where the risks are hidden. Don’t end up relying on volatility and liquidations to generate interest.

What I’ve learned isn’t a technique, but this: when you see extreme signals, first admit that you might not understand them. If you can, hide for a while.