Futures open interest represents the total number of outstanding futures contracts that have not been settled or closed out by an offsetting position. It signifies the total volume of active contracts available for trading in a particular market. An increase in open interest alongside rising prices may suggest strong bullish sentiment, while a decrease could indicate waning interest or liquidation. This metric provides insight into market conviction and potential future price movements.
Context
Analysis of futures open interest is a key component for traders and analysts seeking to gauge market sentiment and potential price trends in cryptocurrency derivatives. Significant shifts in open interest figures are often correlated with substantial price action, prompting close observation by market participants. Discussions frequently involve the interplay between open interest, funding rates, and liquidation levels across major derivatives exchanges.
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