OI + Funding Rate Strategy Cheat Sheet
Strategy 1: OI Spike + Flat Price = Trap Building
Price is not moving, but OI is increasing fast and funding is high.
This means leveraged traders (usually longs) are entering aggressively, expecting a breakout.
But price is flat - that's a trap.
You wait for a fake breakout (price pushes up just enough to trigger longs), then short the reversal.
Entry: Short after the fake pump fails.
SL: Above the fakeout wick.
TP: To the nearest liquidity pocket or previous support.
This is a fade setup - you are betting against the crowd before the liquidation hits.
OI + Funding Rate Strategy Cheat Sheet
Strategy 2: OI Drop + Price Spike = Squeeze in Progress
Price moves sharply in one direction while OI drops - that means positions are being force-closed.
This is a squeeze. For example, shorts are being liquidated, so their exits become market buys, pushing price
up.
You wait for a brief pullback, then long (if it's a short squeeze). You're riding the momentum.
Entry: Long on small pullback after spike.
SL: Below pullback low.
TP: Into next resistance/liquidity zone.
This is a momentum setup - you're going with the liquidation wave already in progress.
OI + Funding Rate Strategy Cheat Sheet
Strategy 3: Price Up + OI Down = Weak Rally
Price is rising but OI is falling. This means short sellers are covering, not new buyers entering.
This creates a temporary pump with no true bullish support.
You short it once signs of exhaustion show.
Entry: Short when price stalls or diverges.
SL: Above local high.
TP: Nearest demand or previous consolidation.
You're fading a weak, short-covering move that is likely to unwind.
OI + Funding Rate Strategy Cheat Sheet
Strategy 4: OI + Funding Combo Trap
OI is climbing, funding is highly positive, and price breaks out.
But the breakout quickly fails with a wick or hard reversal.
This shows longs were trapped into a false move.
Entry: Short when price breaks back inside range after failed breakout.
SL: Above fakeout high.
TP: Where stop hunts/liquidations are likely (recent lows).
You're capitalizing on the reversal that punishes late entries.
OI + Funding Rate Strategy Cheat Sheet
Strategy 5: Funding Extremes = Exhaustion & Reversal
Funding is very negative for a long time, OI is stable or rising, and price starts forming a base.
This indicates extreme short positioning - market makers might engineer a short squeeze.
Entry: Long on breakout from base or bullish structure.
SL: Below structure low.
TP: Into liquidation zones or resistance clusters.
This is a contrarian setup that rides the market reversal after max pain.
OI + Funding Rate Strategy Cheat Sheet
Clarification: Why Strategy 1 and 2 Are Not the Same
They may seem similar, but the phase of market structure is different.
Strategy 1 (OI up, price flat): You're entering before the liquidation wave - you're anticipating a trap.
Strategy 2 (OI drops, price spikes): The liquidation has started - you're riding the squeeze.
Key difference: one is fading a buildup (Strategy 1), the other is momentum-based (Strategy 2).
