Is Open Interest Bearish or Bullish?
Open Interest itself is neither nor bullish. Its interpretation as bearish or bullish depends on market conditions and context, such as price trends and volume. Rising Open Interest can be seen as bullish if accompanied by price increases, indicating growing market interest. Conversely, falling Open Interest during price gains may suggest profit-taking. In downtrends, increasing Open Interest might signal bearish sentiment, while decreasing Open Interest amid declines could hint at potential reversals.