What is open interest and why is it important?
Open interest is a key indicator in derivative markets, reflecting the total number of futures or options contracts that have not yet been settled or closed. In simple terms, open interest is a barometer of activity in cryptocurrency markets, as it indicates the level of participation and the volume of capital committed to an asset. The higher the open interest, the more capital is at stake and, therefore, the greater the potential volatility of an asset's prices.