Perpetual mark price trading ABOVE the spot index (basis_pct > 0.05%) with positive funding confirming the crowded-long premium. Two simultaneous mechanical forces drive the perp back DOWN: (1) arbitrageurs sell the expensive perp and buy spot until the gap closes; (2) longs paying above-normal carry reduce exposure as cost compounds. Mirror-image of Backwardation Reversal — same arb mechanics, opposite direction. RSI 55–80 (bullish momentum that created the premium). Ranked by deepest positive basis.
Quarterly futures premium > perp + high positive funding = nobody left to buy. Both markets priced for upside. Contango premium is mean-reverting — when basis exceeds 1 standard deviation above its 30-day mean, the fade has historical edge.
basis_pct > 0.3% + open interest decent + funding rate > 0.
| Horizon | Swing |
| Scanner timeframe | 1d |
| Confirm entry on | 4h / 1d |
| Typical hold | 2–7 days |
| Max hold / time-stop | Until basis normalizes |
The pages below are free and educational, but the actionable plan stays in the app:
60–65% over 3–7 day windows; sparse setup, fires 2–3x per quarter. Full breakdown in the premium app.