What if Funding-rate reset: overleveraged perps unwind in a long squeeze?
Extreme positive perpetual funding flips as longs get liquidated en masse, producing a sharp but contained crypto drawdown that resets positioning.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Extreme positive perpetual funding flips as longs get liquidated en masse, producing a sharp but contained crypto drawdown that resets positioning. The trigger decomposes into signed root‑shocks — Bitcoin ▼ · Crypto confidence ▼ · Crypto liquidity ▼ · Risk appetite ▼ — which propagate through our causal graph to the markets below.