Myth: a liquidation flush clears out ETH leverage.
MEXC's ETH perp printed 0.0042% funding after the Fed-driven drop and still holds about 1.086M ETH of open interest
Key takeaway
[Current events - ETH perp funding and open interest after the Fed hold] Funding is a small payment between longs and shorts, settled every eight hours, that pulls a perpetual's price back toward the spot index. Open interest is the total size of positions still open.
After a liquidation wave, both numbers tell you something different, and mixing them up is how traders misread the morning after.
The image is MEXC's live ETHUSDT perpetual page at about 10:22 AM ET today: last 2,329.09, -0.23% on the day, index 2,329.97, fair price 2,329.09, funding +0.0092% with about 1h38m to the next settlement, 24h high 2,391.30 and low 2,292.35, volume 734.549K ETH and turnover 1.715B USDT. The 15m chart marks the 2,292.35 low.
The event
The Fed held rates at 3.75%-4% on Wednesday, but two of twelve voters wanted a hike and markets now price about an 82.6% chance of one in December. Overnight a tech selloff hit, bitcoin slid from above 81,700 to about 79,800, and ether was dragged lower with it. About $356M of crypto futures were liquidated in 24 hours. Roughly $72M of that was ETH.
Myth 1: funding drops to zero after a flush
Fact: it dipped, it did not vanish. MEXC's last twelve ETH settlements ranged from 0.0042% to 0.0090%. The lowest was the 4 AM ET print, right after the slide. The live estimate for the next one is 0.0093%, the top of that range. Longs are still paying.
Myth 2: a flush means the leverage is gone
Fact: open interest is still large. MEXC reports 108,629,688 contracts at 0.01 ETH each, about 1,086,297 ETH, or roughly 2.53B USDT at the 2,329.78 fair price. Some longs were forced out; plenty remain.
Myth 3: funding is the main cost
Fact: price range dwarfs it. Work it through:
- Position: long 1 ETH (100 contracts) at 2,329.78.
- Funding at 0.0093%: 2,329.78 x 0.000093 = about 0.22 USDT per settlement.
- Funding at the 0.0042% low: about 0.10 USDT.
- Taker fee 0.02% in and out: about 0.93 USDT round trip.
- The 24h range: 2,391.30 - 2,292.35 = 98.95 USDT per ETH, about 4.14% from the high.
One day of range was worth about 456 funding payments at today's rate.
What 500x means on this tape
MEXC allows up to 500x on ETH. At that setting the liquidation distance is roughly 1/500 = 0.2% minus 0.1% base maintenance, so about 0.1%. Yesterday's 4.14% range was about 41 times wider than that. High leverage is a setting, not a plan. Even 20x, with a gap of roughly 4.9% after maintenance, would only just have covered that range from the high. For most traders the useful question is not how much leverage the venue allows, but how much of a normal day the position can absorb.
Common mistakes
- Treating one low funding print as a new trend.
- Reading open interest as direction. 1.086M ETH open says size, not side.
- Watching last instead of fair price. MEXC liquidates on fair price.
- Ignoring the cap. ETH funding here can reach +/-0.18% per settlement in a squeeze, about 20 times today's rate.
Short FAQ
Q: Why did funding fall right after the drop? A: Forced long selling pushed the perp toward or under the index, which lowers the premium the rate is built on.
Q: Why is it rising again? A: The perp went back to a small premium. Buyers returned faster than the macro picture changed.
Q: Does this predict ETH's next move? A: No. It describes positioning right now.
Try it
Open the ETH perp, note the current funding estimate and open interest, then check them again after the next settlement at 12:00 PM ET. Did funding fall back toward 0.0042% or stay near 0.0093%? That one comparison tells you more about the crowd than the headline.