The correlation between Binance's Open Interest (OI) and Bitcoin's price is a key signal for traders. When the correlation drops significantly (≤ 0.1), it often signals an inverse behavior between price and OI. Historically, this has preceded major volatility spikes in Bitcoin's price. 📈📉
Why? A low correlation suggests leveraged traders on Binance are positioning against the price trend, setting the stage for liquidations. When these positions get squeezed, the price reacts sharply, amplifying volatility. 💥
Key takeaway: Watch for a falling Binance OI correlation—it’s a warning of potential liquidations and big price moves ahead! 🔍
Written by joaowedson
