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Glassnode has explained how the Bitcoin options Open Interest has been climbing recently and looks set to explore new all-time highs (ATHs).
In a new thread on X, analytics firm Glassnode has discussed about the Bitcoin options market. This segment of derivatives trading involves traders betting on future price moves through contracts giving the right (but not the obligation) to sell or buy the cryptocurrency at a set price.
Earlier, perpetual futures was the main derivatives trading pathway that investors in the sector used, but recently, demand for options has grown enough to challenge the futures market.
One way to gauge interest in options is through the Open Interest, an indicator that measures the total amount of contracts related to the market that are currently open on all centralized exchanges.
Here is the chart shared by Glassnode that shows the trend in the Bitcoin options Open Interest over the last few months:
As displayed in the above graph, the Bitcoin options Open Interest reached a new record on October 31st. Shortly after, however, the metric saw a plunge due to the contract expiry.
Options contracts come with an “expiry” date, on which the contract get either exercised or automatically closed out. A large amount of these expiries coincided on October 31st, which is why the indicator saw a flush.
Interestingly, the options Open Interest has been quick to bounce back since then, with its value already halfway back to the ATH. Thus, it would appear demand for options is still alive and well.
From the chart, it’s apparent that a similar pattern was also witnessed after the previous major expiry, when the metric gradually recovered and explored new records. “The options market open interest looks set to keep printing new ATHs, expiry after expiry,” explained the analytics firm.
In terms of trading volume, activity related to the market has been at notable levels since Bitcoin fell below the $107,000 level, as the below chart shows.
Options volume has surged since we broke the 107K level and remains elevated showing the constant activities of the traders readjusting their positions and new traders coming in to put on some hedges.
As for whether investors are opening bearish or bullish trades with these moves, data suggests bearish bets, or “puts,” initially rose during the plunge, but then bullish bets, or “calls,” saw a surge as price rebounded. Once again, however, puts have seen a rise, indicating investors don’t trust a bottom has appeared yet.
Bitcoin has retraced its recent recovery as its price is back at $100,900.
