Open interest relative to price trend

There are 2 components to futures open interest data:

• Non-expiring futures contracts (also known as perpetual swaps or perpetuals)

• Expiring futures contracts

Open interest	Price trend	Implications
High and rising	Rising	Over-leveraged long positions, potential bearish reversal
Remains high	Falling from peak	Traders buying the dip on leverage, exposing themselves to a long squeeze
High and rising	Falling	Over-leveraged short positions, potential bullish reversal
Remains high	Rising from bottom	Traders shorting the spike on leverage, exposing themselves to a short squeeze

When open interest is falling, it indicates a reversal is taking place.

When open interest is low, it indicates that leverage levels are low (significant de-leveraging has taken place).

Open interest is positively correlated to volatility. Option prices, represented by implied volatility, is positively correlated with open interest.

Sources of open interest data are:

• Coinglass

• Cryptoquant

• Glassnode

• ViewBase