On these fake tokens, once the weekend hits, traders pile in one after another. Looking only at the candlestick chart (K-line) and the open interest (OI) for many coins makes it easy to misjudge the market.
By combining price and OI, you can see what is actually driving the行情. When price rises and OI also increases, it means new leveraged positions are entering the market—this is the foundation for the move to continue. If price rises but OI keeps trending downward, it’s often due to short positions getting stopped out, triggering a short squeeze. This spike shouldn’t be mistaken for a fully established trend; whether it can sustain is questionable.
During a decline, OI keeps climbing and a large number of short positions are opened. The contradictions between longs and shorts are amplified, and the following volatility is likely to be very high. If the decline comes alongside OI falling, it indicates that longs are actively reducing positions and exiting—this is typically the phase where selling pressure is being released.
Next, use the funding rate to judge position size. If price climbs rapidly, open positions keep increasing, and the funding rate rises in sync, it suggests severe accumulation of long leverage—meaning the market may already be at the “tail end” of the move.
For low-cap “shanzhai” tokens, the OI data may be distorted. Don’t rely solely on the contract order book to make a direct judgment. It’s best to also check on-chain data to confirm whether large holders are truly buying spot. If contract activity is hot but spot shows no movement, the rally is propped up entirely by leverage within the market; once it drops, it will likely fall back very quickly.
The funding rate is a lagging indicator—it only reflects after the move is already underway. When the rate is pushed to extreme/high levels, it often signals the risk that longs have crowded in, not a reason to chase and buy the breakout.
The upswing caused by a short squeeze is especially deceptive. Candles may print multiple consecutive large bullish candles, but the rise is simply shorts being liquidated and their stop-loss orders being swept. Without incremental new capital entering, just like that, a reversal can happen.
$SUI #sui
By combining price and OI, you can see what is actually driving the行情. When price rises and OI also increases, it means new leveraged positions are entering the market—this is the foundation for the move to continue. If price rises but OI keeps trending downward, it’s often due to short positions getting stopped out, triggering a short squeeze. This spike shouldn’t be mistaken for a fully established trend; whether it can sustain is questionable.
During a decline, OI keeps climbing and a large number of short positions are opened. The contradictions between longs and shorts are amplified, and the following volatility is likely to be very high. If the decline comes alongside OI falling, it indicates that longs are actively reducing positions and exiting—this is typically the phase where selling pressure is being released.
Next, use the funding rate to judge position size. If price climbs rapidly, open positions keep increasing, and the funding rate rises in sync, it suggests severe accumulation of long leverage—meaning the market may already be at the “tail end” of the move.
For low-cap “shanzhai” tokens, the OI data may be distorted. Don’t rely solely on the contract order book to make a direct judgment. It’s best to also check on-chain data to confirm whether large holders are truly buying spot. If contract activity is hot but spot shows no movement, the rally is propped up entirely by leverage within the market; once it drops, it will likely fall back very quickly.
The funding rate is a lagging indicator—it only reflects after the move is already underway. When the rate is pushed to extreme/high levels, it often signals the risk that longs have crowded in, not a reason to chase and buy the breakout.
The upswing caused by a short squeeze is especially deceptive. Candles may print multiple consecutive large bullish candles, but the rise is simply shorts being liquidated and their stop-loss orders being swept. Without incremental new capital entering, just like that, a reversal can happen.
$SUI #sui