Position-price divergences generally fall into three categories. In this case, $PUMP saw rising open interest and falling prices (24-hour open interest +61.13%, price -15.74%):
· Rising open interest, flat price: Long and short positions are both growing, suggesting a buildup; volatility may increase later.
▶ Rising open interest, falling price: New shorts may be pushing the price down, though a crowded short trade could also trigger a rebound.
· Falling open interest, rising price: The rise is mostly likely driven by short covering; whether it has staying power depends on new money stepping in.
Open interest is currently around $139 million. Which do you put more weight on: the data or sentiment?
· Rising open interest, flat price: Long and short positions are both growing, suggesting a buildup; volatility may increase later.
▶ Rising open interest, falling price: New shorts may be pushing the price down, though a crowded short trade could also trigger a rebound.
· Falling open interest, rising price: The rise is mostly likely driven by short covering; whether it has staying power depends on new money stepping in.
Open interest is currently around $139 million. Which do you put more weight on: the data or sentiment?