Price pumping and you're already planning the exit? Check open interest first.
Rising price with rising open interest means new money is entering, fresh positions backing the move. That's conviction. Rising price with falling open interest tells a different story: shorts are getting squeezed and covering, not new buyers stepping in. Same candle, opposite meaning.
Watch for divergence between price direction and open interest direction, especially after a sharp move. It's often the difference between a trend starting and a trend running out of fuel.
Next time you see a strong candle, what does the open interest behind it actually say?
$TRX $BTC $ETH #Trading #TradingEducation #Crypto #TA
Follow for daily trading education · Education only, not financial advice.
Rising price with rising open interest means new money is entering, fresh positions backing the move. That's conviction. Rising price with falling open interest tells a different story: shorts are getting squeezed and covering, not new buyers stepping in. Same candle, opposite meaning.
Watch for divergence between price direction and open interest direction, especially after a sharp move. It's often the difference between a trend starting and a trend running out of fuel.
Next time you see a strong candle, what does the open interest behind it actually say?
$TRX $BTC $ETH #Trading #TradingEducation #Crypto #TA
Follow for daily trading education · Education only, not financial advice.
