Open interest

Open interest is the total number of derivatives contracts, like futures or options, that are currently open and haven't been closed, settled, or expired. It matters because rising open interest alongside rising price suggests new money is entering a trend and backing it, while rising open interest with falling price can signal fresh short positions piling in. For example, if Bitcoin futures open interest on a major exchange jumps from 200,000 BTC to 250,000 BTC while price climbs, traders read that as new long positions fueling the rally rather than existing holders just trading among themselves.