@xxzzzzzzzz
Open interest (OI) in futures markets reveals how much capital is committed to derivatives. Rising OI with rising prices indicates new money entering bullish positions, while rising OI with falling prices suggests aggressive shorting. Sharp OI drops can signal mass liquidations or position closures, often after volatility spikes. Tracking OI alongside funding rates improves interpretation, helping traders distinguish between healthy trend continuation and overleveraged markets vulnerable to reversals.
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