Open interest can fall even as volume rises. Volume counts the contracts traded during a period, while open interest (OI) counts the contracts that have not yet been closed or settled at a given point in time.

Let's count only the same contracts from start to finish

Let's start with a hypothetical futures market with zero open interest. Assume that only the three trades below occurred during the same aggregation period. All figures are in contracts, and are not actual Binance market data or trading records.

First trade: A opens 10 new long contracts, and B opens 10 new short contracts on the other side. The trade volume is 10 contracts, and OI is also 10 contracts. We don't count 20 contracts just because there is a buyer and a seller.

Second trade: A sells 3 long contracts to close them, and B buys those 3 contracts to close existing short positions. Another 3 contracts were traded, so cumulative volume is 13 contracts. Meanwhile, 7 contracts remain open, so OI falls to 7 contracts.

Third trade: A sells 2 of the remaining long contracts to close them, and a new participant, C, buys those 2 contracts to open new long positions. B's 7 short contracts remain unchanged. Cumulative volume is now 15 contracts, but OI is still 7 contracts. The long positions have only been split from A holding 7 contracts to A holding 5 and C holding 2.

15 and 7 are not contradictory

The contracts traded during this period add up to 10 + 3 + 2 = 15. The contracts remaining at the end add up to 10 − 3 = 7. Volume includes trades that open positions as well as trades that close or transfer them. So even if trading is active, OI does not necessarily increase.

Even for trades of the same size, OI increases if both sides open new positions, and decreases if both sides close existing positions. It stays the same when one side closes a position and the other opens a new one. Don't interpret “open” in open interest as referring to limit orders that have not yet been filled.

What an increase in OI does not tell you

Every new contract has both a long and a short side. The fact that OI increased alone does not mean that buying is dominant or that prices will rise. Conversely, a decrease in OI does not mean that every contract in the decrease was liquidated. In the example above, the two participants simply closed existing positions; no liquidations were assumed.

OI also does not directly show the number of participants, newly deposited cash, or total margin. One person can hold multiple contracts, and margin and leverage conditions can differ even for the same number of contracts. You cannot determine those details from volume and OI alone.

The contract count can stay the same while the value increases

Binance's public BTCUSDT trading data chart distinguishes between Open Interest (BTC) and Notional Value of Open Interest (USDT). OI measured in coin quantity and OI converted into value are not in the same units.

Let's assume the 7 contracts from the earlier example remain open, and add the hypothetical assumption that each contract represents 1 coin. The coin quantity is 7. If the conversion price applied to this quantity rises from 10 USDT to 12 USDT, the notional value increases by 20%, from 70 USDT to 84 USDT. This shows how the value displayed can increase even when not a single new contract is created.

This calculation assumes a linear contract, where quantity is multiplied by price. It does not mean that the actual product's contract unit and conversion price basis are the same. Don't conclude that the contract count or newly deposited funds also increased by the same percentage just because the screen shows an increase in OI by value. First check whether you are looking at quantity-based or value-based OI.

Five things to note before comparing charts

Check the exchange, contract name, unit displayed, volume aggregation period, and OI reference time. Don't compare spot trading volume and futures OI as if they were two metrics for the same contract, or add up contract counts, coin quantities, and value figures as if they were interchangeable.

Even if rising volume and falling OI appear together, don't immediately assume there is a chart error or a trading signal. Check the aggregation period and reference time for each metric.

Official concept reference: Binance Academy — What Is Open Interest?

https://www.binance.com/en/academy/articles/what-is-open-interest

Reference for display units: Binance Futures — Open Interest chart in Trading Data

https://www.binance.com/en/futures/funding-history/perpetual/trading-data