Open interest

Open interest counts the contracts that are still open. You'll see how it grows and shrinks, how it differs from volume, and what it can suggest next to the price.

Every perpetual contract has two sides: someone long and someone short. Open interest is how many contracts are open right now.

It only goes up when both people in a trade are opening new positions, and only goes down when both are closing. When one opens and the other closes, a contract just changes hands and open interest stays the same.

Step through the trades.

Volume adds up every trade. Open interest only counts the positions still open at the end.

Day traders who open and close within hours create a lot of volume and leave open interest where it started. When traders open new positions and hold them, open interest climbs.

Switch between the two days. The volume bars are the same in both.

Open interest change 1h compares open interest now with one hour ago, in percent, the same way price change works.

A fast rise means many new positions are opening. A sharp fall means many are closing, by choice or through liquidations.

Open interest says more when you look at the price at the same time. There are four combinations.

None of them is certain. They describe what traders could be doing, and bots here show you the numbers and leave the reading to you.

When the price jumps and open interest falls at the same time, shorts are closing, often because they're being liquidated. Their forced buying pushes the price up further.

The Potential short squeeze template looks for that: price change 15m at or above +2%, open interest change 15m at or below −5%, and short liquidations at least 3× their recent average. Press play and watch the meter.

This is two days of BTC perpetual open interest, shown as the 1h change. The Open interest expansion template fires at +10% in an hour, together with volume at 2× its average.

Move the threshold and count the moments it would fire. Under the chart, the same condition runs on the live feed.

Three quick questions, then a bot to build.

Read the strategy and set up a bot that follows it, with the direction and the conditions it names and no others. The strategy also uses the price change from the first lesson. Passing depends on the build alone. Once it's right, the bot fires and you see what the market did next, which won't always go your way.