How to use CoinGlass
A plain-English guide to funding rates, open interest, liquidation heatmaps and long/short ratios, and what they can and cannot tell you.
What is CoinGlass?
CoinGlass is a free data website focused on crypto derivatives: futures and "perpetual" contracts that let traders bet on prices going up (long) or down (short), often with borrowed money (leverage). Its data is gathered from many exchanges and gives a picture of how traders are positioned. It also covers other data, such as Bitcoin spot ETF flows.
You do not need to trade derivatives yourself to find it useful. Derivatives markets are now very large, and heavily leveraged positioning often explains sudden, sharp price moves.
A few terms first
- Perpetual contract ("perp"): a futures contract with no expiry date, the most popular crypto derivative.
- Leverage: trading with borrowed money. At 10× leverage, a 10% move against you can wipe out your stake.
- Liquidation: when a leveraged trader's losses eat through their deposit (margin), the exchange forcibly closes the position.
Funding rates
Perpetual contracts use a funding rate to keep their price close to the real ("spot") price. Payments are exchanged between traders periodically, commonly every eight hours, though this varies by exchange.
- Positive funding: longs pay shorts. More traders are betting on rises, and they are willing to pay for it.
- Negative funding: shorts pay longs. The crowd is leaning bearish.
What it may signal: very high positive funding suggests the market is crowded and over-optimistic; strongly negative funding can accompany panic. Extremes have sometimes come before reversals, because crowded trades are vulnerable.
Find it: the Funding Rate page shows current rates per coin across exchanges.
Open interest (OI)
Open interest is the total value of derivative contracts that are still open. Unlike volume, which counts trading activity, OI measures how much money is currently committed in positions.
A common (simplified) way to read it alongside price:
- Price up, OI up: new positions, often new longs, are driving the move.
- Price up, OI down: shorts closing (short covering) rather than fresh buying.
- Price down, OI up: new short positions opening.
- Price down, OI down: longs closing or being liquidated.
Rapidly rising OI means leverage is building up, which raises the chance of a violent move in either direction. CoinGlass also shows an OI to market cap ratio: when derivatives are large relative to the coin's market cap, price can swing sharply.
Find it: the Bitcoin open interest page breaks OI down by exchange, with 1-hour, 4-hour and 24-hour changes.
Liquidations and the liquidation heatmap
The liquidation data page shows how many long and short positions have been forcibly closed recently. Big spikes often mark the moments of maximum pain in a move.
The Liquidation Heatmap is an estimate of where future liquidations might cluster, worked out from trading data and typical leverage. Time runs along the bottom and price up the side; colours range from purple (few estimated liquidations) to bright yellow (many).
What it may signal: price is sometimes drawn towards bright bands, because liquidations there would force a burst of buying or selling, and a chain reaction ("liquidation cascade") can follow.
Important: CoinGlass itself describes the levels as a relative intensity indicator. Actual liquidations may be smaller than shown. The heatmap is a model, not a list of real orders.
Long/short ratios
The Long/Short Ratio pages show the proportion of accounts (or, on some views, positions) that are long versus short, as reported by individual exchanges.
What it may signal: a very lopsided ratio means the crowd is leaning one way, which can be a contrarian warning. If everyone is long, there are fewer buyers left and more people who could be forced to sell.
Caveat: ratios differ between exchanges and between "accounts" and "positions". A small number of very large traders can hold the opposite view to thousands of small accounts.
Caveats: read this before relying on any of it
- These are sentiment and positioning indicators, not predictions. Markets can stay "overheated" for a long time.
- Data is incomplete. Not every exchange reports everything, and some figures are estimates.
- No single metric works on its own. Combine several, and remember that news and big spot buyers or sellers can override derivatives positioning.
- Leverage trading is very high-risk. Most retail traders who use it lose money. In the UK, the FCA prohibits firms from selling, distributing or marketing crypto derivatives to retail consumers, so ordinary UK investors cannot trade them with FCA-authorised firms. Offshore platforms that offer them anyway give you little or no UK protection.
This guide is for education only and is not financial advice.