Binance Open Interest Declines: A Warning Sign for Bitcoin Volatility

A recent report warns that a weakening correlation between Bitcoin’s open interest (OI) and price might signal impending volatility. This divergence, historically linked to sharp price swings, suggests that leveraged traders are taking positions against current market sentiment. As these contrarian bets grow in size, the market risks an amplified reaction when price movements diverge from them, leading to potentially volatile events like forced liquidations.