Instagram is making it easier to connect with friends on Instagram by showing you when they’re available to chat.
When your friends are active on Instagram, you’ll see a green dot next to their profile picture in various spaces within the app, including the Direct inbox and your friend list when you share a post from feed. You will only see status for friends who follow you or people who you have talked to in Direct. You can easily hide your own status and turn off the ability to see when your friends are active in your settings. DMing friends and connecting over the content you love is more fun when you know your friends are there to see it. This update gives you the ability to have more of those realtime conversations while giving you the control to hide your status altogether.
SOURCE: Instagram Press