According to Osho, observing the breath matters because breath is the living bridge between body and soul; by becoming aware of inhalation and exhalation, you directly realize you are not merely the body. Breath reveals the three layers—body (shell), prana/breath (link), and soul (foundation)—and standing at this central point makes the inward move toward the realm of spirit possible.
Watching your breathing shows you that you’re more than the body and helps you step toward your true inner self.