Why does a big drop in coin prices and a surge in open interest (OI) not necessarily mean 'whales are buying the dip'? When I first started trading contracts, I saw a coin dropping while OI was surging. My first thought was: so much money is flowing in, someone must be buying at the bottom, and a rebound is just around the corner. Later, I realized that OI only tells you new positions are being opened—it doesn’t tell you who’s long or short, and it definitely doesn’t guarantee that it’s smart money entering the market. I’ve tried to catch bottoms like this before. The price kept dropping, but OI kept hitting new highs. Everyone in the group chat was saying, 'The whales are building positions against the trend.' I followed and went long, but the price kept falling, funding rates quickly turned negative, and when I reviewed it later, I realized the new OI included both trend-following shorts and bottom-fishing longs. The more longs tried to catch the bottom, the more stop-losses and liquidations ended up fueling the next leg down. To interpret OI, you have to combine it with price, trading volume, funding rates, and liquidation data. If the price is rising and OI is increasing, it could mean trend-following positions are being added. If the price is falling and OI is increasing, it could mean shorts are aggressively attacking, or it could mean longs are catching falling knives. Only when the price stabilizes, spot buying shows real support, or high-leverage positions are flushed out, will the signals become more reliable. Looking at a single indicator is like hearing that the number of chips in a casino is increasing, but not knowing which side people are betting on. Remember: A surge in OI means the game is getting more intense, not that the bottom is in. Before the price confirms, what you think are whales entering could just be more people lining up to become the next batch of liquidity.