Aggregated Open Interest [Alpha Extract]

The Aggregated Open Interest indicator provides a comprehensive view of open interest across multiple cryptocurrency exchanges, allowing traders to monitor institutional positioning and market sentiment. By aggregating data from major exchanges like Binance, BitMEX, and Kraken, this indicator offers valuable insights into potential price movements and market shifts.

🔶 CALCULATION
The indicator processes open interest data through multiple analytical methods:
Exchange Aggregation: Collects and normalizes open interest data from multiple exchanges (Binance, BitMEX, Kraken) with proper currency normalization.

Multi-Mode Analysis: Calculates various metrics including raw open interest values, OI change, OI delta, volume-weighted delta, and OI RSI.

Divergence Detection: Uses pivot point analysis to identify divergences between price action and open interest movements.

Activity Assessment: Tracks bullish and bearish activity patterns by correlating open interest changes with price movements.

Formula:

Aggregate OI = Sum of normalized open interest from selected exchanges

• OI Change = Current OI - Previous OI
  
• OI Delta = Net change in open interest across timeframes
  
• OI Delta × Volume = OI Delta weighted by relative volume
  
• OI RSI = Relative Strength Index applied to open interest values
  
• OI Heatmap = Multi-timeframe visualization of OI changes across 7 distinct periods
  

🔶 DETAILS
Visual Features:

• Open Interest: Candlestick representation of aggregated open interest
  
• OI Change: Histogram showing period-to-period changes
  
• OI Delta: Histogram displaying net OI movements
  
• OI Delta × Volume: Volume-weighted OI delta for enhanced signals
  
• OI RSI: Oscillator showing overbought/oversold OI conditions
  
• OI Heatmap: Multi-timeframe visualization showing OI changes across 7 periods (3, 5, 8, 13, 21, 34, and 55 days)
  

Divergence Detection: Color-coded markers (teal for bullish, red for bearish) highlighting significant divergences between price and open interest

Analysis Table: Real-time summary of key metrics including aggregate OI, recent changes, and bullish/bearish activity.

Interpretation:

• Increasing Open Interest + Rising Price: Strong bullish trend confirmation
  
• Increasing Open Interest + Falling Price: Strong bearish trend confirmation
  
• Decreasing Open Interest + Rising Price: Weak bullish trend (potential reversal)
  
• Decreasing Open Interest + Falling Price: Weak bearish trend (potential reversal)
  
• Divergences: Signal potential trend exhaustion and reversals when price moves in one direction while open interest moves in the opposite direction
  
• Heatmap: Provides at-a-glance insight into open interest trends across multiple timeframes, with green bars indicating rising OI and red bars indicating falling OI
  

🔶 EXAMPLES

Trend Confirmation: Rising open interest accompanying a price increase confirms strong bullish momentum with institutional backing.

Example: During January-February 2025, rising OI during price advances confirms institutional participation in the uptrend.

Bearish Divergence: Price makes a higher high while open interest makes a lower high, signaling potential trend reversal.

Example: Red markers appear at market tops where price continues higher but open interest fails to confirm, preceding significant corrections.



Bullish Divergence: Price makes a lower low while open interest makes a higher low, indicating potential bottoming.

Example: Teal markers appear at market bottoms where price continues lower but open interest fails to confirm, preceding significant rallies.

OI Heatmap Analysis: Multiple timeframes showing consistent red signals across short to long-term periods indicate strong institutional selling pressure.

Example: When all 7 periods (3-55 days) show red during a price uptrend, this signals institutional selling into retail strength, often preceding major corrections.

🔶 SETTINGS

Customization Options:

• Data Sources: Toggle different exchanges (Binance USDT/USD/BUSD, BitMEX USD/USDT, Kraken USD)
  
• Display Mode: Choose between Open Interest, OI Change, OI Delta, OI Delta × Volume, OI RSI, and OI Heatmap
  
• Currency Units: Display in USD or base cryptocurrency (COIN)
  
• Analysis Tools: Moving Average (length and color), RSI (length and color)
  
• Divergence Detection: Enable/disable signals, adjust lookback period and threshold percentage, customize bullish/bearish divergence colors
  
• OI Heatmap Colors: Customize bullish (green) and bearish (red) signal colors for the multi-timeframe heatmap visualization
  

The Aggregated Open Interest indicator provides traders with comprehensive insights into institutional positioning across major exchanges, helping identify potential trend continuations, reversals, and key market turning points driven by smart money movements. The addition of the OI Heatmap feature enables traders to quickly visualize open interest trends across multiple timeframes, providing valuable context for institutional positioning over different market cycles.