medium · Order Flow Analysis absorption-exhaustion-imbalance
What does a rising price accompanied by falling Open Interest (OI) typically indicate about a rally?
- New institutional buying is clearly what is driving this entire move higher overall.
- Demand is perfectly meeting supply at these newly established, higher price levels overall.
- The market is entering into a durable, long-term institutional accumulation phase across the board.
- The rally is driven by short covering (trapped traders exiting) and is likely unsustainable.
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