📈📉 Open Interest (OI) – a metric I ignored blowing my $600. OI is total open futures contracts. Rising OI means new money enters, bolstering the trend. Falling OI? Positions are closing, less market participation.
Now, with price:
Price UP + OI UP: Strong bullish, new buying.
Price UP + OI DOWN: Weak rally, likely short covering.
Price DOWN + OI UP: Strong bearish, new selling.
Price DOWN + OI DOWN: Long liquidation, signals potential reversal.
Practical signal: Divergence. Price hits new highs but OI is *lower* than previous highs? That rally lacks conviction. New money isn't joining; often precedes a reversal. Don't trade blindly like I did.
#OpenInterest #FuturesTrading #MarketAnalysis #CryptoTrading #BinanceSquare
Now, with price:
Price UP + OI UP: Strong bullish, new buying.
Price UP + OI DOWN: Weak rally, likely short covering.
Price DOWN + OI UP: Strong bearish, new selling.
Price DOWN + OI DOWN: Long liquidation, signals potential reversal.
Practical signal: Divergence. Price hits new highs but OI is *lower* than previous highs? That rally lacks conviction. New money isn't joining; often precedes a reversal. Don't trade blindly like I did.
#OpenInterest #FuturesTrading #MarketAnalysis #CryptoTrading #BinanceSquare