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OVERVIEW

Where The Dynamite Is Buried: A 30-Day Funding Tour 🧨

Here’s What’s Happening 👇️

Top trending crypto tickers today on Stocktwits: Rayls, XYO Network, Orca, Monero, and Dogecoin

Gainers today: $PI ( ▲ 6.2% ) , $TAO ( ▲ 4.33% ) , $PEPE ( ▲ 1.98% ) , $WLFI ( ▲ 2.33% ) , and $UNI ( ▲ 1.53% )

Losers today: $M ( ▼ 11.79% ) , $ZEC ( ▼ 4.42% ) , $HYPE ( ▼ 3.8% ) , $XLM ( ▼ 1.04% ) , and $SKY ( ▼ 2.56% )  

Before we dive in, here’s today’s crypto crypto’s total market and altcoin market cap charts:

SPONSORED BY COINSHARES

In this short video, Lark Davis breaks down a question many investors are starting to ask: what role do altcoins play in the broader crypto landscape? 

He explores: 

• How altcoins differ from Bitcoin 

• Why some networks focus on utility instead of store of value 

• How smart contracts enable applications like decentralized finance and digital payments

Disclosures: This content is provided by Lark Davis and is a paid promotion for Valkyrie Funds  LLC (d/b/a CoinShares Valkyrie). Lark Davis is not a client of CoinShares Valkyrie but is compensated by CoinShares Valkyrie (or its affiliate) for creating and sharing this content. This creates a material conflict of interest, as Lark Davis has a financial incentive to highlight positive information about the Fund. The views expressed are Lark Davis’ own and are not individualized investment advice. Investing involves risk, including possible loss of principal.

*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.

NEWS
What Funding Rates Are And Why You Should Care 🧠

Perpetual futures don't expire. That's the magic and the curse. It's why they're the most-traded contract in crypto and it's why they need a babysitter to keep their price tethered to spot.

That babysitter is the funding rate.

Every set number of hours, longs and shorts pay each other based on which side of the trade is more crowded. 

• Positive funding = longs paying. Bulls are crowded enough to keep perps at a premium to spot. The deeper the positive, the more aggressively they're financing the seat.

• Negative funding = shorts paying. Bears are crowded. They're giving up carry to hold the position. When negative funding holds for weeks, that's not a vibe. That's a paid short campaign. Somebody thinks the move down is worth a recurring monthly bill.

• Capped funding (+0.90% on most exhcnages) = max crowding. The system limits how high funding can climb. When funding pins at the cap on every venue for 30 days, there's no marginal long left to find.

One last thing. Funding that gets stretched - either deep negative or pinned at the cap - rarely resolve gracefully. The trades that cost the most to finance are the ones with the most squeeze fuel loaded under them.

Let’s dive in. 👇️ 

ON-CHAIN ANALYSIS
Bitcoin Funding Rates - The Designated Driver Of A Crypto DUI Convention 👨

$BTC ( ▼ 0.72% ) ’s funding is the only one on this panel that doesn't look like it needs an ambulance. Median funding sits near zero. Everyone is having a Diet Coke.

As we’ll see when we look at the other tickers, Bitcoin is at the rooftop bar drinking water and answering Telegram and Discord mesages while everyone else takes turns getting wheeled out.

What that tells me from a flow perspective: the rotation isn't into a crowded BTC long. Nobody is slamming perps to chase a number. The flow shows up on the spot side - ETF behavior, treasury accumulation, balance migration off exchanges - while the leverage book stays neutral.

No crowded longs to flush. No crowded shorts to squeeze. The next move comes from spot demand. Boring funding is often regarded as bullish funding when the rest of the screen looks like a an episode of The Walking Dead.

ON-CHAIN ANALYSIS
Ethereum Funding Rates - Shorts Have A Subscription Fee And A Loyalty Program 😶

$ETH ( ▼ 0.01% ) funding is a bloodbath. Binance -1.31%. MEXC -1.31%. BingX -1.32%. Bitunix -1.31%. LBank -1.31%. Gate -1.23%. Bybit -1.16%. OKX -0.80%. KuCoin is the lone +0.24% holdout, like the one guy still doing keg stands while the cops are taking statements.

Shorts have been paying about 1.3% per month - roughly 16% annualized - for the privilege of being bearish ETH. They've signed up for the ETH-Goes-Down Plan, premium tier, auto-renews, no cancellation fee because nobody wants to cancel.

Nobody pays that kind of carry casually. They pay it because they think the move is coming and they want to be in the seat when it arrives.

When every venue except one has shorts at max carry, the asymmetry has flipped. Any catalyst could light this - ETF flows, Hormuz opens, Iran peace deal, new Fec chair, etc. In the event things change for the bulls, shorts will have to cover.

With both hands. While weeping.

ON-CHAIN ANALYSIS
Solana Funding Rates - The Bear Trade Has An RSVP List And It's Already Closed 🛑 

$SOL ( ▼ 0.46% ) funding is pretty similar to ETH but with structural cracks already showing. Except for that weird position on WhiteBIT. Like that one cousin at Thanksgiving wearing shorts in December because he "runs hot." He doesn't. He's wrong. But he's committed.

Somebody or somebodies on WhiteBIT has put real size on the long side and is paying to stay there. Or it was a fat finger, multiple fat fingers over a 30-day period. I don’t know.

Structurally, Bybit is barely negative. KuCoin is softening. WhiteBIT actively contrarian. The bear conviction looks like it’s bleeding away at the edges while the median holds out of habit.

Also: short squeezes always show up. They're like in-laws. And it’s been a while since your mother in law came to visit.

ON-CHAIN ANALYSIS
XRP Funding Rates - The Only Major Where Bulls Still Pick Up The Check 💵

$XRP ( ▼ 0.68% ) is the only ticker of the bunch paying carry instead of collecting.

Either the market thinks XRP has its own catalyst running independent of the L1 selloff or the XRP Army is doing what the XRP Army has done since 2017, which is show up to every party regardless of whether anyone invited them and order the most expensive thing on the menu.

Possibly both. Probably both.

But take a look at the the Binance/MEXC/LBank short. Those are ‘pro-flow’ perp platforms. When pro platforms lean one way and the rest of the world leans the other, you don't have a unanimous trade, you have an early warning sign that somebody is going to be eating ramen for a quarter.

ON-CHAIN ANALYSIS
Hyperliquid Funding Rates - The Room Is At Fire-Code Limit And The Bartender Looks Nervous 😰

Good God $HYPE ( ▼ 3.8% ) ’s funding rate is insane. I thought maybe Claude messed up the artifact image of the funding rates because, well, AI does weird shit all the time. But nope.

I mean Hyperliquid’s book is full. Closed sign on the door. Capacity reached. Everyone who wanted to be long HYPE is already long HYPE, and paying max carry to be long.

Pinned funding for a month means leverage longs are stacked on top of spot longs and the structure has gone reflexive. As long as price holds, funding stays paid. Price stalls? Funding starts draining the longs faster than spot demand can absorb.

I’m not saying this thing is going to flush, but if it does, everyone long is going to get a hard lesson on what a "max carry liquidation" looks like in their account statement.

ON-CHAIN ANALYSIS
Sui Funding Rates - Pure L1-Alt Fatigue, Carry Included 📊

With the exception of Bitunix, $SUI ( ▲ 0.31% ) funding has gone uniformly negative.

Every venue except one has shorts collecting carry, longs paying carry, and the trade pointing in the same direction. It’s like everyone is all in the same trade and they're all being paid to stay there. What could possibly go wrong?

Sui is in the same bucket as ETH and SOL but without the offsetting story. There's no ETF speculation (well, no major speculation). The funding profile reads as pure L1-alt fatigue. Money is rotating out and the perp flow is just the carry stacked on top of the spot bleed.

It's a tax on a trend that's already happening.

But if a second exchange flips positive, the short book starts wobbling. I'm watching for positive funding to spread to another exchange(s) because the financing is stretched to where one good news cycle could detonate the whole consensus and remind a lot of people what max-pain looks like.

OLD NEWS
Crypto Stuff That Happened Today, But A Long Time Ago 📜

Here’s what was happening in the newsletter a year ago today:

• Privacy coins randomly went vertical - Monero spiked as much as 53% and Zcash jumped about 23%.

• TOKEN2049 week was starting.

• Kraken kept inching toward full-service finance mode - teaming with Alpaca to add 11,000+ U.S. stocks and ETFs.

• Strategy bought more Bitcoin. Again. - another 15,355 BTC for about $1.42B.

Here’s what was happening in the newsletter two years ago today:

• This was weekend data-dive issue.

• Crypto was still well below the highs, but holding up on the year - total market cap was down 20.94% from the all-time close, while still up 37.67% YTD and 100.41% YoY.

• Altcoins lagged the broad market again - altcoin market cap was down 36.42% from the all-time close, while altcoins ex-ETH were down 39.28%.

• The weekly sector board was green across the board - Smart Contracts (+7.1%) and Proof-of-Work (+6.8%) led, while Metaverse (+2.8%) was the weakest winner.

OLD NEWS
Other Stuff That Happened Today, But A Long Ass Time Ago ⌛️

April 28

• 224 - Battle of Hormozdgan. Parthian Empire ends.

• 1192 - Conrad the First, King of Jerusalem, is assassinated by the Hashshashins - the Order of Assassins.

• 1294 - Temur elected as Khagain of the Mongols.

• 1788 - Maryland ratifies the U.S. Constitution.

• 1789 - Mutiny on The Bounty.

• 1792 - The French Revolutionary Wars begin with France invading Austrian Netherlands.

• 1920 - Azerbaijan Soviest Socialist Republic founded.

• 1923 - Wembly Stadium opens.

• 1952 - The Treaty of San Francisco ends the state of war between most of the Allied powers and Japan, the Sino-Japanese Peace Treat is signed in Taipei, Taiwan between the Republic of Chin and ends the Second Sino-Japanese War.

• 1986 - Soviet authorities publicly announce the Chernobyl disaster.

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Author Disclosure: The author of this newsletter holds positions in AVAX, ADA, PUDGY, WLD, NEAR, INJ, LTC, LINK, ZEC, XLM, and FET. 📋