What is Open Interest?
The total number of outstanding derivative contracts (futures or options) that have not been settled — a measure of market participation and sentiment.
Open interest (OI) is the total number of active futures or options contracts across all traders at any given moment. Unlike trading volume (which counts every transaction), open interest only counts contracts that are still open.
How it changes:
Reading open interest:
| Price Direction | OI Change | Signal |
|---|---|---|
| Price up + OI up | New money entering long | Bullish |
| Price up + OI down | Shorts covering | Weaker bullish signal |
| Price down + OI up | New money entering short | Bearish |
| Price down + OI down | Longs capitulating | Weaker bearish signal |
Liquidation risk from high OI:
Very high open interest combined with high leverage creates liquidation risk. If price moves sharply, cascading liquidations (one triggers another) can amplify the move significantly. Traders call this a "liquidation cascade."
Where to find OI data: CoinGlass and most exchange dashboards show current open interest and historical charts.