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📊 How to Read Open Interest
Master derivatives data to gain an edge in your crypto trading
What is Open Interest?
Open Interest (OI) is the total number of outstanding derivative contracts (futures/perpetuals) that have not been settled.
OI Increases When:
- • A new buyer opens a long AND a new seller opens a short
- • Fresh money enters the market
- • Conviction is building in a direction
OI Decreases When:
- • An existing long closes AND an existing short closes
- • Money exits the market (deleveraging)
- • Positions are liquidated or profit-taken
Why Does OI Matter?
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Trend Confirmation
Rising OI confirms that the current trend has conviction. Falling OI suggests the move may be exhausting.
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Squeeze Detection
Falling OI during price moves often indicates forced liquidations - short squeezes or long liquidations.
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Market Positioning
High OI at certain price levels indicates where liquidations may cluster - potential support/resistance.
Reading the MSP Open Interest Widget
Widget Elements:
- Total OI:Sum of all open contracts across top 20 coins (in USD value)
- 24h Change:Percentage change in OI over the last 24 hours. Green = increasing, Red = decreasing
- BTC/ETH Dominance:What % of total OI is in BTC vs ETH vs Altcoins
- Contracts:Number of coin units in open positions (not USD value)
Quick Signals:
↑ +5% OI= Strong new positioning, expect volatility
↓ -5% OI= Deleveraging event, reduced conviction
Alt Dom > 30%= Risk-on sentiment, altseason potential
Data sourced from Binance Futures. Updated every 5 minutes.
This is educational content, not financial advice.