Open interest counts how many of those up-or-down bets are currently alive and unsettled across the whole market. In plain terms, it is a measure of how much money — and how much borrowed money — is riding on the action right now.
The trick to reading it is to always pair it with what price is doing. If price is rising and open interest is rising too, that means fresh money is pouring in and actively backing the move — a sign of real conviction. But if price is rising while open interest is falling, it often just means people who bet down are giving up and closing their bets, which is a much weaker, less trustworthy kind of rise.