Contango
When futures prices sit above the spot price — the normal state that signals bullish positioning and funds basis trades.
Contango describes a market where futures prices are higher than the current spot price, typically because traders are willing to pay a premium to hold leveraged long exposure into the future. In crypto’s perpetual markets, contango shows up as persistently positive funding rates.
Sustained steep contango is a positioning signal: the market is crowded long and paying to stay that way — historically fuel for sharp liquidation flushes on any dip. It’s also what makes the basis trade profitable. Its opposite, backwardation, is rarer in crypto and often marks fear or supply squeezes.