$ICNT ｜15-minute open interest +5.42%｜Price +1.93%
Before discussing capital flows, first understand open interest.
Every increase in open interest necessarily involves both a long and a short, so the idea that “a sharp rise in open interest means bullish sentiment” is a common misconception.
Rising prices alongside rising open interest are often seen as active entry by new longs, while falling prices alongside rising open interest are often seen as active entry by new shorts.
The same reading can mean very different things in different market conditions, so don’t blindly apply a single rule.
Before discussing capital flows, first understand open interest.
Every increase in open interest necessarily involves both a long and a short, so the idea that “a sharp rise in open interest means bullish sentiment” is a common misconception.
Rising prices alongside rising open interest are often seen as active entry by new longs, while falling prices alongside rising open interest are often seen as active entry by new shorts.
The same reading can mean very different things in different market conditions, so don’t blindly apply a single rule.