📊 Open Interest: what this number actually says
I ignored this metric for a long time, thinking “well, a number and a number” 🙈 But it turns out—this is one of the most useful indicators in futures
What is Open Interest (OI)? It’s the total number of open (not yet closed) contracts in the market. Not the daily trading volume—specifically how many positions are “alive” right now
How I read it now
📈 Price is rising + OI is rising = new money is entering the market, the trend is confirmed by new longs. A strong bullish signal
📉 Price is falling + OI is rising = new shorts are entering, the bearish trend is gaining momentum
📈 Price is rising + OI is falling = shorts are closing positions (not new buyers entering)—the move is weaker than it seems, and often it’s just “squeezing out shorts”
📉 Price is falling + OI is falling = longs are taking losses and exiting—also a weak move, not a new trend
Why this is important for a beginner:
Price alone doesn’t tell you WHY it’s moving. OI helps you understand whether the move is backed by new interest from participants, or whether old positions are simply being closed. The second case is much less reliable for trend continuation
You can find OI directly on the Binance futures chart—there’s a separate tab/indicator
$NVDAB $BTC
I ignored this metric for a long time, thinking “well, a number and a number” 🙈 But it turns out—this is one of the most useful indicators in futures
What is Open Interest (OI)? It’s the total number of open (not yet closed) contracts in the market. Not the daily trading volume—specifically how many positions are “alive” right now
How I read it now
📈 Price is rising + OI is rising = new money is entering the market, the trend is confirmed by new longs. A strong bullish signal
📉 Price is falling + OI is rising = new shorts are entering, the bearish trend is gaining momentum
📈 Price is rising + OI is falling = shorts are closing positions (not new buyers entering)—the move is weaker than it seems, and often it’s just “squeezing out shorts”
📉 Price is falling + OI is falling = longs are taking losses and exiting—also a weak move, not a new trend
Why this is important for a beginner:
Price alone doesn’t tell you WHY it’s moving. OI helps you understand whether the move is backed by new interest from participants, or whether old positions are simply being closed. The second case is much less reliable for trend continuation
You can find OI directly on the Binance futures chart—there’s a separate tab/indicator
$NVDAB $BTC