The State of Crypto Options Markets After the Recent Sell-Off (Report)

by

When Your Wallet Shrinks Faster Than Your Last Relationship! šŸ’”šŸ’ø

Oh, what a curious windy morning it was when the financial market, that notorious vagabond, decided to throw a tantrum reminiscent of a child denied their favorite sweet. With sharp declines plummeting through stock indexes and digital assets alike, it appears DeepSeekā€™s artificial intelligence model, that sly mischievous sprite, has cast a striking shadow over the market, sending shivers down the spines of crypto enthusiasts.

Much to our surprise, in the midst of this rollercoaster, open interest in perpetual swaps for denizens of the Bitcoin jungle and their cryptocurrency cousins remained as stoic as a potato on a cold winterā€™s night. Remarkably, those pesky funding rates took a brief dip into the negative before regaining their footing, as if remembering they had somewhere important to be. Meanwhile, oh! The options market, in a fit of exuberance, decided to twirl and dance, recording a pirouette of trading activity! šŸŽ­

Ethereum Options: The Bullish Unicorn of the Crypto Kingdom šŸŒˆ

Fear not, for as per a tale spun by the illustrious minds of Bybit and Block Scholesā€”the duo known for their unquenchable thirst for detailā€”Ethereum options have donned a rosier complexion, more cheerful than their Bitcoin counterparts. Indeed, Ethereum options have maintained a cheeky volatility premium, prancing about the market with a jaunty flair.

For the past month, theyā€™ve reveled in trading volume at a rate that could make an overambitious baker blush while attempting to rise with the dough! In a surprising twist reminiscent of a soap opera plot, the latest data emits vibes of an open-interest tilt towards call options. Oh, the drama!

Despite the tumult of the recent sell-off, which temporarily petrified investors, Ethereum options continued to carry themselves with a grace reminiscent of a ballroom dancer, always poised, unlike the sluggish ether spot price, which trails behind Bitcoin in a manner akin to an uninvited cousin at a family reunion.

Bitcoin Options: Whereā€™s the Excitement? šŸ˜“

As for our old friend Bitcoin, like a weary traveler carrying a heavy rucksack, it shows little change, save for the grim but necessary act of renewal through short-dated tradesā€™ expiration and reopening. Voila! Solana options have decided to join the party as well! Theyā€™ve seen penned deals for both puts and calls, thriving as if in a marketplace where presidential memecoins tantalize the masses.

With stable new put options fluttering about in the Solana field, it seems investors are taking the cautious route, buying insurance for their profitable ventures in other perplexing financial instruments, lest they find themselves swallowed by the beast of market folly!

“Oh, the chorus of short-tenor options drone on with lower volatility and a neutral skew. But lo! the longer-dated volatility smiles mock us with their increased expectations of bullish winds on the horizon,” the report curiously noted, as if engaging in a philosophical debate in a smoky tavern.

Meanwhile, Bitcoin has achieved a new record of carrying the highest single-day trading volume for calls this month, hitting a staggering $250 million amid a price descent! However, alas, like a sad song that wonā€™t leave your head, volatility continues to slink away, both in realized and implied forms, as though it has tired of this dreary waltz.

Read More

2025-02-02 18:08