Glassnode explained that Bitcoin Options Open Interest has been climbing recently and looks set to explore new All-Time Highs (ATHs).
Open interest in Bitcoin options has already returned after the end of October
In the new one thread on X, analytics firm Glassnode discussed the Bitcoin options market. This segment of derivatives trading involves traders betting on future price movements through contracts that give the right (but not the obligation) to sell or buy cryptocurrency at a specific price.
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In the past, perpetual futures were the main form of derivatives trading used by investors in the sector, but recently demand for options has grown enough to challenge the futures market.
One way to measure interest in options is through Open Interest, an indicator that measures the total amount of market-related contracts currently open on all centralized exchanges.
Here’s a chart shared by Glassnode showing the trend of open interest for Bitcoin options over the past few months:
As shown in the chart above, Bitcoin Options Open Interest hit a new high on October 31st. Shortly thereafter, however, the metrics saw a decline due to the expiration of the contract.
Options contracts come with an “expiry” date, at which the contract is either executed or automatically closed. A large amount of these expirations coincided on October 31st, causing the indicator to record a blush.
Interestingly, the Open Interest option has recovered quickly since then, and its value is already halfway back to the ATH. So the demand for options seems to be still alive and well.
It is evident from the chart that a similar pattern was observed after the previous big expiration, when the metric gradually recovered and explored new records. “It looks like options market open interest will continue to print new ATHs, expiration after expiration,” the analyst firm explained.
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In terms of trading volume, market-related activity has been at significant levels since Bitcoin broke below the $107,000 level, as the chart below shows.
How the volume related to the options market has changed over the past month | Source: Glassnode on X
As Glassnode noted:
Options range has increased since we broke the 107K level and remains elevated indicating continued activity from traders re-adjusting their positions and new traders coming in to hedge.
As for whether investors are opening bearish or bullish trades with these moves, the data suggests that bearish bets, or “puts,” initially rose during the decline, but then bullish bets, or “calls,” rebounded as price recovered. Once again, however, puts have rallied, indicating that investors do not believe the bottom has yet appeared.
The price of BTC
Bitcoin returned to its recent recovery as its price returned to $100,900.
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
