The current state of cryptocurrency, macro events, and trading indications from spot trade activity as well as futures, options, and perpetual contracts are all covered in our weekly crypto derivatives analytics report.
Despite an overall decreasing trend in implied volatility, at-the-money implied volatility for 14-day tenor options has increased with only two weeks to go before the election. As a result, the term structure is noticeably steep. Numerous important indicators show that sentiment is still favorable, including rising open interest in futures and call options as well as positive funding rates for all tokens under observation, not just BTC and ETH.
The market is anticipated to remain quiet as the U.S. election draws near, which means that Bitcoin’s 70K may not be seen until after November. Please review the highlights of the report.
All Tokens Show Strong Funding Rates
Sources: Bybit, Block Scholes
A noticeable accumulation of optimistic sentiment across the cryptocurrency ecosystem is evident from the constantly high and positive funding rates for perpetual contracts shown by all tokens. One important trend to keep an eye on is the buildup of long positions looking for leveraged exposure, which is one of the first obvious indications that traders are preparing for the election. Despite the funding rate costs, traders are still hungry for leveraged long exposure even as spot prices have retreated from the early October rise.
BTC Call Options Dominate
Sources: Bybit, Block Scholes
The most prominent open positions are BTC call options, which further reflects the election-related bullishness. Implied volatility is significantly influenced by this occurrence, as seen by the large spike in 14-day tenor options over the preceding week. On the other hand, implied volatility for all other tenors has been trending down.
7D Option Implied Volatility Plunges
Sources: Bybit, Block Scholes
Interestingly, there have been significant swings in 7-day implied volatility, which has led to generally lower levels and a fairly steep term structure. With only two weeks left until the election, market players are giving the event’s possible effects more weight than immediate fluctuations.
