Open Interest & Liquidation Data is a powerful tool for analyzing the state of the cryptocurrency market! đ It shows the total number of open positions in the derivatives market, whether long or short. This means that you can see how many traders are willing to risk their assets in the hope of profit. đ„
When Open Interest grows, volatility in the market increases, because more traders are betting on their strategy. And if positions start to close, then liquidation đ„ occurs - a forced closure of a transaction by the exchange due to insufficient funds. So it is important to monitor this data, because it helps to predict sharp movements in the market! đ
In simple words: if you see an increase in open positions and liquidations, get ready for rough waves! đ This can help you make a timely decision, whether to buy or sell.
