The chart shows the open interest (OI) of the ONDOUSDT Perpetual contract on Binance Futures for the period from December 3, 2024 to January 1, 2025.
Data Analysis:
1. Open Interest Trend:
Since December 3, there has been a general increase in open interest, indicating an increase in the number of open positions.
Open interest peaked at the end of December, reaching 135.4M.
2. Nominal value of OI:
The white line shows the nominal value of open interest. It is clear that it has some fluctuations, but overall it maintains an upward trend.
This may indicate an increase in interest in the contract or an increase in trading volume.
3. Volatility periods:
There are sharp fluctuations from December 10-17, which may be due to liquidations of positions or large capital injections.
Since December 24, open interest has been steadily increasing, indicating that interest from traders has strengthened.
Possible conclusions:
Rising OI often indicates a strengthening trend. If the asset price also rises, this confirms bullish sentiment. If the price falls while OI rises, bearish sentiment is likely with short positions accumulating.
The sharp swings in mid-December could have been caused by fundamental events or sharp market volatility.
Recommendations:
1. Check the price dynamics of the asset for the same period for an accurate interpretation.
2. Take into account macroeconomic events or announcements that could affect this contract.
3. Assess trading volumes to confirm the strength of the trend.
The decline in the nominal value of open interest (white line) at the end of December against the backdrop of an increase in total open interest (yellow bars) may indicate the following scenarios:
1. Decrease in the price of an asset:
The OI notional value decreases if the underlying price falls, even if the number of open positions increases. This may indicate that the bullish trend is weakening.
2. Active hedging:
Traders may be increasing the number of contracts to hedge risk, but the decrease in notional value is due to a decrease in volatility or price range.
3. Closing large positions:
If large players closed their positions, this could cause the nominal value to decline despite the overall rise in OI.
4. Change in the structure of positions:
A shift from more expensive contracts to less risky ones is possible. This could happen against the backdrop of the end of the year, when market participants are trying to secure profits.
What to do:
Price Analysis: Check how the price of ONDOUSDT changed during this period. If it went down, this confirms the first scenario.
Liquidation Estimates: Look at the liquidation data for the end of December. The sharp movements could have been caused by a massive liquidation of positions.
News context: The market may have been reacting to external events or expecting low activity due to the holidays.
This could be a key signal for a market correction or preparation for a new trend.
