A surge in bitcoin derivatives activity reminiscent of late 2021 has sparked renewed enthusiasm among traders. Factors such as the cost of perpetual futures trading and rising options open interest indicate a revival of speculative interest in bitcoin.
The cryptocurrency has experienced a significant price recovery This year, its value has more than doubled after a tumultuous 2022.
bitcoin Options Open Interest Hits New All-Time High
bitcoin–btc-2021-record-run-emerge-in-derivatives-market#xj4y7vzkg” target=”_blank” rel=”noopener nofollow”>According According to Bloomberg, anticipation surrounding the possible approval of the first US spot bitcoin exchange-traded fund (ETF) has contributed to increased attention.
The approval of such ETFs is expected to attract a wider range of investors to the asset. While the exact level of ETF inflows remains uncertainThe possibility of higher demand is driving riskier trading strategies.
Deribit, the largest crypto options exchange, reported a record notional value of approximately $14.9 billion in bitcoin options open interest earlier this week.
This surpassed the previous $14.4 billion set in October 2021, just before btc hit its all-time high of nearly $69,000. For clarity, open interest refers to outstanding contracts that have not yet been settled.
On this matter, Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets, recently highlighted the strong demand for crypto call options. While some traders have taken leveraged positions speculating on a possible breakup At $100,000 or more, the immediate test is at the $38,000 level.
bitcoin approached $38,000 before retreating and is currently trading at $36,400. Notable trends in the bitcoin futures and options markets can be observed through three key charts.
Futures and Options Chart Insights
Perpetual futures They do not have an established expiration date and They are popular derivatives of btc. The funding rate, a cost of holding positions, tends to be positive during bullish periods.
According to the report, the seven-day moving average funding rate for btc perpetual futures closely resembles the levels seen in the final quarter of 2021, when bitcoin was peaking.
bitcoin futures curves provide insight into the price outlook. All curve based on Chicago Mercantile Exchange (CME) The group’s contracts have increased compared to a month ago.
The farthest contract now amounts to almost $40,000, while before it reached almost $32,000. CME’s open interest in bitcoin futures has surpassed that of Binance, suggesting greater institutional participation in using futures for long-term exposure to btc.
Deribit data reveals a predominance of bullish options bets on btc, reaching $40,000 and even $45,000 by the end of December. Traders’ willingness to sell call options means $40,000 could become a major testing zone for bitcoin‘s rally.
Overall, the increase in bitcoin derivatives activity and growing interest in options and perpetual futures indicate renewed bullish sentiment among traders.
The possible approval of US btc spot ETFs has contributed to this increased enthusiasm. As bitcoin approaches key resistance levels, market participants are eagerly watching for further developments, with $40,000 being a crucial point in the ongoing rally.
Featured image from Shutterstock, chart from TradingView.com
