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Open interest (OI) measures the total value of active futures contracts. Surging OI during rising prices can indicate strong bullish conviction, but also increased liquidation risk if funding rates spike. Declining OI during rallies may suggest profit-taking or cautious positioning. When OI grows without major price movement, a breakout often follows as positions resolve. Monitoring OI across BTC and ETH on major derivatives platforms, alongside delta between perpetual and spot prices, helps traders detect over-leveraging or hidden accumulation phases in advance of large directional moves.
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