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Bybit and analytics firm Block Scholes released a derivatives market report indicating mixed signals for ethereum and bitcoin.
The report highlights a decline in ethereum (eth) perpetual open interest, primarily due to the liquidation of overleveraged long positions. These positions had been built up during a period of optimism, but were reset with the drop in eth spot prices, according to the report shared with crypto.news.
The report also notes that eth futures contracts have not seen the same drop in open interest as eth perpetual swap contracts during a brief lull in bullish price momentum. However, positioning has increased for both (btc) and eth.
Despite this rally, the total size of open positions has yet to recover from the expiration of approximately $20 million in contracts at the end of November 2024. This indicates that traders who had contracts expiring in November have not returned to the market with the same volume. . By contrast, btc perpetual positions have remained stable, even after a recent pullback from a high above $100,000.
Perpetual swaps are a type of derivatives contract that allows traders to speculate on the price of an asset without owning it. They are widely used in crypto markets, but unfavorable price movements can force leveraged traders into liquidation, reducing market activity.
eth outperforms btc in options, driven by volatility
The report reveals that ethereum continues to outperform bitcoin in options open interest, particularly as year-end expirations approach. However, trading volumes have declined, reflecting a general sense of caution in the market.
The options term structure for eth shows higher realized volatility compared to future expectations, indicating a difference in sentiment versus btc, which shows a flatter term structure.
