On Nov. 4, crypto data market aggregator CryptoQuant published a chart indicating Binance’s Estimated Leverage Ratio (open interest divided by Bitcoin (BTC) reserves) has pushed into new all-time highs. The record was set on Nov. 3 after a spike in open interest pushed Binance’s ELR above 0.18 for the first time. The spike in ELR came shortly before Bitcoin established a double-bottom at roughly $13,400. New data suggests Bitcoin’s bullish push into 2020 highs above $14,000 may have been fueled by leverage, which could mean markets will continue to see significant volatility in the short term. However, Binance also recorded …

The open interest on Bitcoin (BTC) options contracts has reached a new all-time high at $2.9 billion. Interestingly, this feat happened only five days after the October expiry, which liquidated $400 million worth of options. Over the past six months, the options market has grown three-fold, causing investors to grow more curious about the potential impact upcoming expiries will have on the Bitcoin price. Data from Cointelegraph and Digital Assets Data also show that monthly Bitcoin transaction volume and BTC futures volume has been on the rise since the end of October. When analyzing options, the 25% delta skew is …

The digital asset industry as a whole looks significantly different than it did three years ago. A Wild West-esque year, 2017 boasted astronomical asset price increases and booming fundraises amid underdeveloped regulation. Some elements of 2017, such as initial coin offerings, have largely died off. Other niches, such as derivatives trading, have since experienced watershed growth, as noted in a recent report from United States crypto exchange, Kraken. "Beginning with pioneers like Crypto Facilities, BitMEX, Deribit, BitVC (now HuobiDM), and OKEx, deriviatives trading in crypto markets really took hold in 2017, dovetailing the entrance of traditional incumbents like the CME …

The price of Bitcoin (BTC) declined by 2% in under an hour in a sharp correction on Nov. 2, catching traders off guard. Coincidentally, the CME Bitcoin futures market opened with a new gap, making $13,100 an area of interest for sellers. Three technicals reasons likely fueled the abrupt decline in the price of Bitcoin: CME gap, major resistance and monthly moving averages (MAs). There are now four CME Bitcoin futures gaps The CME Bitcoin futures market closes during the weekend and on holidays. This means that if BTC sees a large price movement during those days, a gap between …

As the weekend approaches, Bitcoin (BTC) price appears set to close out the month with a remarkably strong performance which has many bulls calling for a new all-time high above $20,000 in the near future. Traders attribute these lofty estimates to the fact that BTC appears to have flipped $12,000 to $12,500 to support and barring some unexpected price implosion, Bitcoin is on the path to painting a beautiful monthly candle. Further ‘bullish’ evidence comes from today’s options and futures expiry which saw $450 million of futures open interest expiring as of Oct.28. According to Cointelegraph contributor Marcel Pechman: “The …

A total of 62K Bitcoin (BTC) options are set to expire this Friday, and this is equivalent to $830 million in open interest. These massive numbers fail to reflect the fact that 58% of these options are now deemed worthless. As we approach the expiry date, call (buy) options above the current level begin to depreciate very fast. It is not worth paying $20 for the opportunity to buy BTC at $14.5K on Friday morning. Therefore, rolling options to the next month is not that helpful. With less than 48 hours to October's expiry, call (buy) options above $14.5K and …

A big Bitcoin (BTC) volatility spike could occur by the month’s end as two major factors come into play. The BTC options market nears a massive $750 million expiration and the CME futures market’s open interest has also soared. When an options expiry nears, holders of options contracts have to adjust their contracts before or right after the expiration. Often times, that could cause volatility in the price of Bitcoin. Monthly close, options expiry, and CME expiration all coincide It is difficult to gauge the volatility coming from Bitcoin options until one to two days before the actual expiration. But, …

The CME Bitcoin futures market overtook Binance Futures to become the second-biggest Bitcoin (BTC) futures exchange by open interest. The data shows that the institutional volume is rapidly gaining a larger share of the cryptocurrency market. On Oct. 10, Skew reported that the CME Bitcoin futures market’s open interest rose sharply by 1,500 contracts. Since then, within three days, the price of BTC surged 9% to over $13,000. The growing open interest of CME’s futures contracts on BTC is likely to have a positive effect on BTC price, particularly as a recent study found that "CME Bitcoin futures contribute more …

For novice traders, FOMO can be a heavy burden to bear. Resisting the urge to buy Bitcoin (BTC) after a nearly 15% rally, which saw the price break both the $12K and $13K levels in less than 24 hours, is almost impossible. Professional traders are more experienced and know precisely how to play these FOMO-inducing situations. As data has shown, they were mostly adding shorts up to October 20, right before the $12K rupture. Most investors fail to grasp that being a pro trader does not mean all the emerging trends are played profitably. Instead, surviving when things go wrong …

Bitcoin (BTC) has a 7% probability of beating its $20,000 all-time highs by the end of this year, data shows. According to data from on-chain analytics resource Skew, as of Oct. 22, Bitcoin options were moving in favor of higher prices continuing in 2020. BTC odds “repricing quickly” At press time, the likelihood of BTC/USD being $20,000 or higher by Dec. 31, 2020 was 7%, with 11% for $18,000. By March 2021, more bets said that Bitcoin would have reclaimed $20,000 (14%), while the figure for June 2021 was 18%. On social media, Skew said that the probability data was …

Per guidance released Wednesday evening, the Commodity Futures Trading Commission (CFTC) is advising businesses trading in crypto derivatives to hold customer funds very carefully. The new guidance continues the CFTC's interest in carving out rules for custodianship of virtual currencies — an area obviously distinct from any other asset class. Per the commission: "Custodians of virtual currencies are typically not subject to a system of comprehensive federal or state regulation and oversight, which includes safeguarding of these novel assets, and this raises potential risks to the protection of customer funds held at such custodians." The specific provisions of the guidance …

As Bitcoin (BTC) breaks the $12,000 resistance, derivatives markets are flirting with overly excessive bullish sentiment. The futures basis and the options 25% delta skew both reached the same levels seen now on October 12 when BTC briefly tested $11,700 but failed to maintain momentum. What differentiates the current situation from nine days ago is the positions of top crypto traders. On Oct. 12, these traders increased their longs, but during the recent move to $12,000 these professional traders are opening up short positions. Despite this flip in sentiment, traders should not automatically conclude that today’s pump will turn into …