Bitcoin

Open Interest hit a record $ 2.9 billion in Bitcoin options to $ 14,259 after BTC rallied

Open interest in Bitcoin (BTC) options contracts hit a new all-time high of $ 2.9 billion. Interestingly, this feat happened just five days after the end of October, which liquidated $ 400 million worth of options.

Bitcoin options are fully open. Source: Skew

In the past six months, the options market has tripled, making investors more curious about the potential impact of the upcoming expiration dates on Bitcoin price.

Monthly volume of BTC transactions. Source: Digital asset data

Data from Cointelegraph and Digital Assets Data as well show that the monthly transaction volume of Bitcoin and the volume of BTC futures have increased since the end of October.

BTC futures volume after exchange. Source: Digital Assets Data
Open Interest hit a record $ 2.9 billion in Bitcoin options to $ 14,259 after BTC rallied
Open Interest hit a record $ 2.9 billion in Bitcoin options to $ 14,259 after BTC rallied

When the options are discussed, The 25% slope of the delta is the most relevant indicator. This indicator compares similar call and put options side by side.

This indicator It becomes negative if the premium of put options is higher than that of call options with a similar risk. A negative slope leads to higher protection costs down, which indicates an upward trend.

The opposite occurs when market makers are bearish, Bringing the 25% incline indicator of the delta into positive terrain.

25% slope of the delta of the 3-month BTC options. Source: Skew

Fluctuations between -10% (slightly bullish) and + 10% (slightly bearish) are considered normal. This has not been the case since October 19, when Bitcoin topped the $ 11,600 level and never looked back.

This indicator is the most important piece of evidence that a trader interested in derivatives needs to understand the current sentiment in Bitcoin options.

You should know the ratio of call and put options for additional confirmation

To further examine how these tools are used in traders’ strategies, You need to be aware of the buy-sell relationship. Call options are generally used in neutral and bullish strategies, while put options are the opposite.

By analyzing the relationship of open interest between put and call options, you can roughly estimate how bearish or bullish traders are.

Bitcoin Call and Put Ratio Ratio. Source: Skew

Open interest for put options lagged 30% compared to more bullish call options. After the expiration in October, this difference increased when the indicator hit its lowest level in 3 months.

Given the current conditions displayed by the tilt indicator and the call-and-put ratio, there is little to be concerned about the growing open interest in options.

The market has signaled bullish intentions The markets for liquid derivatives enable the big players to hedge and enter the spot market.

From a BTC options perspective Everything is clear so that the current bull run can continue.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement is associated with risks. You must do your own research when making a decision.

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