Open Interest, Funding Rate and Long/Short Ratio Explained

Price tells you where the market is. Derivatives data tells you who is pushing it there and how crowded each side is.

Open interest

Open interest (OI) is the total value of open futures positions. Every contract has a long and a short, so OI does not tell you direction by itself — it tells you how much money is committed. Rising OI with rising price means new longs are entering; rising OI with falling price means new shorts. Falling OI means positions are being closed, voluntarily or through liquidations.

Funding rate

Perpetual futures have no expiry, so exchanges keep their price close to spot with periodic funding payments. When the perp trades above spot, longs pay shorts (positive funding); when below, shorts pay longs. Persistently high positive funding shows an eager, leveraged long crowd — the kind that gets squeezed when price stalls.

Long/short ratio

Exchanges publish the share of accounts (or of top traders' positions) that are net long. Retail-heavy ratios are often a contrarian signal at extremes; top-trader ratios show what larger accounts are doing. Neither is a trading signal alone.

Reading them together

• Price up, OI up, funding moderate — a healthy trend fed by new positions.
• Price up, OI up, funding very high — crowded longs; vulnerable to a flush.
• Price down, OI down sharply, big long liquidations — capitulation; often near a local low.
• Price flat, OI rising, funding negative — shorts building into support; squeeze risk.

Why aggregate across exchanges

Binance, Bybit, OKX, Hyperliquid and others each hold a different crowd. Summed OI and volume-weighted funding give the market-wide picture and remove single-venue noise.

AggPro charts aggregated open interest, funding and long/short ratios under the price, alongside liquidations and the order book.