During the recent downtrend, Open Interest (OI) increased significantly, while funding remained at a neutral level.
This indicates that both the Long and Short sides are actively participating in the market.
Ideally, OI should cool down a bit, which would make the price structure more "healthy."
A simpler way to understand this is: Many positions are being squeezed in at the same time → the market is more prone to sharp swings, hitting both ends. When OI decreases, the next move usually becomes clearer, so traders should be cautious when entering positions at this time ⚠️
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