Open interest (perpetual futures)

Open interest on a perpetual futures market is the total value of every contract currently open on that coin, every leveraged long and short position that hasn't yet been closed. It's distinct from volume, which counts how much traded during a given window and resets each period; OI is a running standing total, not an activity count. A coin can see enormous volume in a session while its OI barely moves at all, if traders are mostly opening and closing positions against each other rather than adding fresh net exposure to the market.

Read perp open interest alongside price direction, not on its own, since the same OI change means something different depending on which way price is moving at the time. OI rising with price rising means new long money is entering the market, fresh bullish exposure. OI rising while price falls means new shorts are building instead, fresh bearish exposure. OI falling, regardless of which way price is moving, means existing positions are closing or unwinding rather than new ones opening, and a sharp OI drop during a fast price move is often what a liquidation cascade looks like from the open-interest side: leveraged positions getting forcibly closed rather than voluntarily unwound.

OI on its own doesn't say which side is adding exposure; that read only comes from pairing it with price direction, and even then it's an aggregate across the whole market, not a breakdown of any individual trader's position. It also can't distinguish a position closing voluntarily, a trader taking profit or cutting a loss on their own terms, from one being forcibly liquidated; both show up identically as a drop in OI. And like funding rate, OI describes leveraged derivatives exposure only. It says nothing about spot holdings or unleveraged positioning happening in parallel.

Ethereum's perpetual open interest climbs from $8.2 billion to $9.1 billion over a session while price rises from $3,480 to $3,560, a combination read as fresh long money entering the market alongside the rally. The following week, OI climbs again from $9.1 billion to $9.6 billion, but this time price falls from $3,560 to $3,410, the opposite read: new shorts building into the decline rather than longs. A third session sees OI drop sharply from $9.6 billion to $8.3 billion during a fast 6% price decline in under an hour, consistent with a wave of leveraged long positions getting force-closed rather than a calm, voluntary unwind.