Volume, open interest and liquidity
How much is traded, how many contracts are open, and why these numbers matter when you read a market.
Prices tell you where a market is. Volume and open interest tell you how much activity stands behind that price.
Trading volume
Volume is the total amount traded over a period, usually 24 hours. It can be counted in the coin (base volume) or in the quote asset, such as USDT (quote volume).
- High volume means many participants are active.
- A price move on high volume is usually taken more seriously than the same move on low volume.
Open interest
Open interest is the number of futures contracts that are currently open — positions that have been opened and not yet closed. It applies to futures, not to spot.
- Rising open interest with a rising price: new money is opening positions in the direction of the move.
- Falling open interest: positions are being closed.
Open interest does not tell you whether the open positions are mostly long or short — every contract has both a buyer and a seller.
Liquidity
Liquidity is how easily you can trade without moving the price much. It depends on volume and order book depth. Large coins such as BTC and ETH are usually much more liquid than small ones.
University materials are for education only and are not investment, legal or tax advice.