Bitcoin Options Open Interest Hits Peak Hours Before Giant $1B Expiry

Published at: June 25, 2020

Bitcoin (BTC) options continue to see record open interest this week with a $1 billion expiration just one day away.

According to data from on-chain analytics tool Glassnode and others, demand for options continues to underscore the uncertain market mood.

CME Bitcoin futures open interest beats record

On June 25, open interest in Deribit Bitcoin futures hit three-month highs of $98 million, while options open interest now stands at $1.2 billion. 

The overall derivatives gains have been broadly driven by options demand — something that speaks to investors’ confidence in the Bitcoin price trajectory for the rest of 2020. 

As Cointelegraph reported last month, when downward price pressure characterized BTC/USD in a similar way to current conditions, options data showed just a 9% chance of all-time highs of $20,000 returning this year. 

Nonetheless, futures are booming — CME Group likewise posted record open interest for its futures and options on Wednesday.

“The total open interest for bitcoin derivatives on CME (futures + options) just reached a new all-time high. This is mostly driven by increased demand for options,” fellow analyst Arcane Research summarized in a blog post, citing data from Skew.

“Friday marks a huge day in the option market as $1 billion worth of bitcoin contracts will expire, with CME accounting for close to $300 million.”

Bitcoin options open interest six-month chart. Source: Skew

Spotlight on macro for BTC price

Expiry events on Bitcoin derivatives have historically coincided with price volatility. This time, however, the major factor at play appears to be macro market sentiment. 

In light of a clear recent correlation between Bitcoin and stock markets, Cointelegraph Markets analyst filbfilb told traders that jitters related to Covid-19 formed the main influence.

“Yesterday there was a bit of a sell off, narrative about miners moving coins and also some talk about the plus token coins moving again, however evidently Bitcoin continues to predominantly move alongside equities and COVID news,” he told subscribers of his dedicated Telegram trading channel.

Uploading a 4-hour chart for BTC/USD, filbfilb added:

“100/200 day moving average (DMA) cross has happened on the daily but the 50 DMA has been lost. Assuming equities hold up today id expect that to be tested.”

Cointelegraph has a dedicated guide to Bitcoin options for readers which is available here.

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