Record High of Active Bitcoin Supply Amid Market Changes

Bitcoin recently experienced a downturn, but the expiry of a significant amount of BTC options today could influence its weekend performance. After reaching a high of $38,000 on November 16th, Bitcoin’s price corrected.

Today’s expiration of around 35,000 Bitcoin option contracts, valued at about $1.3 billion according to Deribit, marks a significant event in the crypto market.

Current Dynamics in Bitcoin and Ethereum Markets

The put/call ratio for today’s Bitcoin options stands at 0.49, indicating a higher number of long contract sellers compared to short sellers.

Deribit also highlighted that the total open interest in Bitcoin options is at a peak of $14.6 billion. Interestingly, the open interest in BTC options now exceeds that in BTC futures, signaling increased market complexity.

Luuk Strijers, CCO of Deribit, commented on this trend:

The surpassing of BTC options open interest over futures is a sign of market maturity. It shows a growing preference for options as tools for strategic planning, hedging, or capitalizing on volatility, which reflects the market’s evolving sophistication

Analysts note that despite Bitcoin’s recent test of the $38,000 level, its realized volatility has settled around 40%.

Additionally, about 268,000 Ethereum option contracts are set to expire today, with a nominal value of roughly $531 million and a put/call ratio of 0.41.

Ethereum’s market is also showing more call contract sellers than put sellers. Deribit analysts observed a sharp increase in Ethereum’s realized volatility, reaching 60% in a day, following news of BlackRock’s ETF application.

Overview of the Current Crypto Market State

The crypto markets have had an impressive start to 2023 after a noteworthy 2022. Despite a recent 2.5% decline, bringing the market cap below $1.5 trillion, the total market value has risen by 28% from last month to $1.44 trillion.

At the time of writing, Bitcoin was trading at $36,447, up by 0.7%, while Ethereum saw a 3.3% decrease, falling below $2,000, trading at $1,982. Other altcoins also showed a downturn in their values.

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