Indicator Overview

The Funding Rates (Altcoin Index) indicator tracks the Annualised Funding Rate (AFR) for perpetual futures of the equal-weighted Top 10 Altcoin Index. This index compiles the following top 10 utility-focused altcoins (as of December 2025):

1. Ethereum (ETH)

2. XRP (XRP)

3. BNB (BNB)

4. Solana (SOL)

5. Cardano (ADA)

6. Chainlink (LINK)

7. TRON (TRX)

8. Monero (XMR)

9. Avalanche (AVAX)

10. Litecoin (LTC)

The index price is calculated as the average of these 10 altcoins’ prices (equal weighting, no rebalancing specified here). Funding rates are aggregated from Binance for the respective perpetual contracts.

The raw funding rate is annualised by multiplying by 365 and 100 to express it as a percentage. The result is plotted with the altcoin index spot price overlaid on a secondary logarithmic axis. Positive AFR values (paid by longs to shorts) signify excessive leverage and bullish sentiment across the altcoin sector, while negative AFR values (paid by shorts to longs) suggest excessive shorting and bearish sentiment. The unique insight is visualising market sentiment extremes through the gradient-coloured AFR line and area fill in this utility-driven altcoin basket.

How To Use

The indicator uses horizontal lines at +5% AFR (Overbought) and -5% AFR (Oversold), acting as actionable signalling thresholds. When the AFR line crosses above +5%, it suggests the futures market for these altcoins is becoming overly euphoric and over-leveraged, potentially preceding a local top or a deleveraging event (long squeeze) in the broader altcoin sector. Conversely, when the AFR crosses below -5%, it indicates significant short interest, often a sign of market capitulation or a local bottom before a potential short-squeeze rally. Traders can also use the integrated SMA or EMA to identify trend shifts: a change in the moving average’s colour (from red to green or vice-versa) confirms a momentum shift in speculative sentiment across the basket. Investors can monitor these extremes to time entries, exits, or hedging strategies in these top altcoins during periods of heightened leverage and sentiment-driven volatility.