Price is pumping. Does that mean buyers are actually convicted, or is it just shorts running for the exit?
That's what open interest tells you. Open interest measures how many contracts are still active in the market. When price rises and open interest rises with it, that move is backed by fresh positions — new money is entering, conviction is building. When price rises but open interest falls, it usually means shorts are getting squeezed and closing out, not new buyers stepping in. Same logic applies on the downside in reverse.
Next time you see a strong candle, check open interest before assuming the move has real weight behind it.
Ever caught yourself reading a pump as strength when it was actually just a squeeze?
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Follow for daily trading education · Education only, not financial advice.
That's what open interest tells you. Open interest measures how many contracts are still active in the market. When price rises and open interest rises with it, that move is backed by fresh positions — new money is entering, conviction is building. When price rises but open interest falls, it usually means shorts are getting squeezed and closing out, not new buyers stepping in. Same logic applies on the downside in reverse.
Next time you see a strong candle, check open interest before assuming the move has real weight behind it.
Ever caught yourself reading a pump as strength when it was actually just a squeeze?
$ETH $BNB $SOL #Trading #TradingEducation #Crypto #TA
Follow for daily trading education · Education only, not financial advice.
