- ETH perpetual positions are declining as the market falls.
- BTC exceeds ETH in perpetual, but ETH wins in options.
As a seasoned analyst with years of experience navigating the complex and ever-evolving world of cryptocurrency derivatives, I find myself intrigued by the latest developments at Bybit and Blocks Scholes. The partnership between these two titans promises to shed new light on the dynamics of ETH perpetual trades, which have held their ground remarkably well amidst the market’s downturn, in stark contrast to BTC’s dominant presence in perps open interest.
It seems that Bybit is changing the course of derivatives trading right now. Once recognized as the largest global cryptocurrency exchange in terms of volumes, Bybit has recently teamed up with Blocks Scholes to provide derivatives analytics. This move suggests that ETH perpetual trades have not dipped below their highs since then, while BTC currently reigns supreme in perps open interest and activity levels.
In the past week, both Bitcoin (BTC) and Ethereum (ETH) have retreated from their previous levels. Bitcoin pulled back from roughly $100,000, while Ethereum moved away from around $4,000. Analysts predict that the open interest in Ethereum might diminish as it is not performing well on the spot market, although they remain somewhat optimistic due to the ongoing bullish sentiment. This cautiousness has led to a decrease in the funding rate within the market.
ETH pulls back while BTC flatlines
The report reveals significant patterns in the derivatives market, notably a sharp decrease in Ethereum’s perpetual open interest resulting from the liquidation of heavily leveraged long positions that have lowered funding rates. Conversely, Bitcoin’s perpetual activity maintained equilibrium throughout December 2024, but experienced a brief surge when Bitcoin surpassed $100K last week.
After unwinding leveraged long positions in perpetual swaps, the funding rate has settled around 0.01%, suggesting that the market is adjusting its leverage levels to prevent overly bearish sentiments. In simpler terms, the market seems to be finding a balance between taking on more or less risk.
Although ETH perpetual contracts are decreasing, ETH options are performing better than Bitcoin options. As the year-end expirations approach for ETH options, trading volumes have reduced due to the impact of spot price fluctuations on the market. Interestingly, ETH options display an inverse term structure relative to Bitcoin’s flat structure, which can be attributed to realized volatility surpassing anticipated future volatility.
This study will delve into a comprehensive examination of the changing trends in the spot trading volumes for various cryptocurrencies, including futures, options, and perpetual contracts. It will provide intricate insights into the developmental journey of the cryptocurrency derivatives markets.
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2024-12-18 13:46