A Comprehensive Explanation of the Relationship Between Price, Open Interest, and Funding Rates
Recently, there have been many small-cap stocks, often with funding rates maxed out, and the funding rate changed to 1 hour. At that time, I didn’t understand why this situation occurred. Moreover, I observed that when many small-cap stocks surged sharply, this situation would arise. After studying the principle carefully, I found it quite interesting, and I summarized a relatively reliable trading method... Now I will share it with all of you for discussion. 1. The Relationship Between Open Interest and Price Open Interest Increase and Price Trend: When the price rises and open interest increases simultaneously, it indicates that capital continues to flow into the market, intensifying the divergence between long and short positions, and the original trend may continue.