Definition ∞ Derivatives open interest refers to the total number of outstanding derivatives contracts, such as futures or options, that have not yet been closed or settled. This metric indicates the total amount of money committed to a market, signifying active participation. In crypto markets, high open interest often suggests strong market sentiment and potential for significant price movements. It represents the aggregate sum of long and short positions currently held by traders.
Context ∞ Crypto news frequently references derivatives open interest to gauge market leverage and potential volatility. The state of open interest often sparks discussions among analysts regarding impending liquidations or price squeezes. A critical future development involves the increasing institutional participation in crypto derivatives, potentially altering market dynamics and liquidity.
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