Open interest
Open interest is the count of outstanding perp contracts. On its own it tells you almost nothing, paired with price direction it tells you what kind of flow is moving the tape. The OI panel and the OI flow classifier on the BackQuant pro terminal are two views of the same idea.
What OI is, and isn't
Open interest is the total number of perp contracts currently open across the venues Kiyotaka aggregates. It rises when new positions open and falls when existing positions close. Volume measures activity; OI measures positioning.
A rising OI doesn't tell you whether longs or shorts are building, only that somebody is. The interpretation comes entirely from pairing it with price direction.
The four-quadrant read
- LONG BUILDPrice up + OI up. Fresh longs are entering. Constructive while it lasts, but the position is now leveraged and vulnerable to a flush. Watch funding for the second-derivative read.
- SHORT BUILDPrice down + OI up. Fresh shorts are entering. Trend continuation while it holds, but a sudden price reversal forces a short-cover squeeze that's typically violent.
- LONG UNWINDPrice down + OI down. Longs are getting flushed (liquidations or voluntary). Capitulation candidate, often marks local lows. Pair with the Liquidations panel to confirm.
- SHORT COVERPrice up + OI down. Shorts are closing. Often the cleanest fuel for an extended rally, since the move is funded by buying-to-close, not new longs piling in.
OI / price flow classifier
four states, one matrixFresh longs entering. Constructive but leveraged. Vulnerable to a flush.
Fresh shorts entering. Trend continuation, but a sudden reverse forces a squeeze.
Shorts closing. Cleanest fuel for trend continuation.
Longs flushed. Capitulation candidate, often marks local lows.
OICLASS panel on the pro terminal.The OI flow classifier panel on the pro terminal computes this quadrant on a rolling basis and emits the live tag. The same read is available manually by overlaying OI as a Study sub-pane and watching how the line moves relative to the candles above.
What to watch for
- Sustained long-build into resistance with funding spiking is a classic local-top setup. The longs are crowded, paying carry, and one liquidation cascade away from a flush.
- Long-unwind into the lows, OI drops 10-20% in a few hours while price falls, is a capitulation signature. Liquidations spike, funding can flip negative briefly, and the tape often bottoms after.
- Short-cover into a rally while OI is shrinking is the most reliable fuel for trend continuation. The fresh longs haven't arrived yet to provide the next round of flush risk.
The 24h percentage matters more than the level
The headline number on the OI tile of the perps summary is the 24-hour percent change. A 5% move in OI in 24 hours is fast; 10% is very fast. The level itself ($30B vs $40B) is meaningful only relative to the same coin's recent history, which is why the panel surfaces a percent caption next to the level.
- OIOI panel, cross-exchange aggregate, history window.
- OI BTC PERPBTC perp OI specifically.
- OICLASSOI / price flow classifier, emits the live quadrant tag.
- STUDYStudy panel with OI as the sub-pane for price-aligned reading.