I noticed that traders are using the funding fee to manipulate the market, although we can not call it manipulation too because they want to make profit, but they can also lose. That is trading. If you are trading these less volatile coins with high funding fee, you will noticed what that I am talking about.
To manipulate the market, market makers use more tools than funding rate. I consider funding rate as one of consequences of market manipulations. It is not a cause of market manipulation but it is one of results from manipulation.
Funding rate is like supply and demand of amateur traders with loan in the market. It shows their demand and sentiment, greed or fear. You can look at funding rate to guess the market sentiment but it is not enough to have an overview of the market. Funding rate, trading volume, zoom out the chart to see a general trend of the market.