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Question #528

Why is a 1.433% increase in futures open interest a key figure for understanding retail and institutional Bitcoin activity?

Category: General
It forecasts future price direction guaranteeing that Bitcoin will drop by a specific percentage soon
It measures daily trading volume and shows how many Bitcoins were exchanged in spot transactions today
It implies spot Bitcoin price moved by 1.433 percent from the previous day's closing price
It shows open interest grew reflecting new capital entering market by retail and institutional participants

Why is this the correct answer?

This is correct because futures open interest measures the total number of open contracts at a given time. A 1.433 percent increase means more traders are opening positions rather than closing them. Beginners should learn that rising open interest often indicates fresh money entering the market, not just profit taking. Seeing both retail and institutional investors active suggests broader confidence in Bitcoin’s price direction without guaranteeing whether it will move up or down.

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