In the past week, the turnover of Bitcoin futures has rebounded by more than 10% from the previous month, the turnover of Ethereum futures has increased by more than 66% from the previous month, and futures positions have fallen for three consecutive weeks. The weekly trading volume of CME Bitcoin options surged nearly three times from the previous month to USD 124 million, and the trading volume of Bit.com surged nearly 50% to USD 108 million.
Weekly market dynamics
Huobi Contract launched BTC/USDT option contract.
Futures market
Overview of extreme market liquidation
In the past week (August 28 to September 3), Bitcoin fell sharply after breaking the US$12,000 mark for a short period of time, and it fell below the US$10,000 mark today. On Wednesday, it fell nearly US$800 in a single day and liquidated its position to US$223 million. At 8 o’clock on Thursday night, Bitcoin fell by more than $600 in one hour, with a liquidation of US$240 million, and a single-day liquidation of US$336 million. From Wednesday so far, Ethereum has plummeted by nearly 100 US dollars to near 390 US dollars, less than 3 days to liquidate 202 million US dollars.
BitMEX, Binance, Bybit, Huobi and OKEx five exchanges’ Bitcoin futures liquidation data statistics, source: Coin
Trading volume
The statistical scope of Bitcoin futures includes BitMEX, Binance, Bitfinex, Bakkt, Bybit, CME, Deribit, FTX, Huobi and OKEx. The statistical scope of Ethereum futures includes BitMEX, Binance, Bitfinex, Bybit, Deribit, FTX, Huobi and OKEx.
Bitcoin futures trading volume broke the record of four consecutive weeks of decline. The total futures trading volume in the past week was US$84.075 billion, a 12% increase from the previous week. Daily trading volume of Bitcoin futures contracts, source: Skew
Ethereum’s weekly trading volume surged by more than 66% from the previous month to 50.226 billion US dollars. The single-day trading volume on September 2 and 3 reached 12.64 billion USD and 12.936 billion USD respectively, second only to August 2 (13.92 billion USD).
Open positions
Open positions are an important indicator that has a high degree of correlation with market heat. After falling 7% from a high level last week, the open position of Bitcoin futures continued to fall by more than 16% in the past week to below US$4 billion, approximately US$3.954 billion.
Open positions in Bitcoin futures, source: Skew
The value of Ethereum holdings declined for three consecutive weeks . After a brief rise above nearly US$1.6 billion on September 1, it fell back to US$1.132 billion as of September 3, a decrease of more than 10% from a week ago.
Open positions in Ethereum futures, source: Skew
Given that the data on Ethereum holdings has shown a downward trend for three consecutive weeks , investors need to pay close attention to whether the value will rebound in the short term.
Option market
Trading volume
The scope of Bitcoin options statistics includes Bakkt, Bit.com (launched on August 17), CME, Deribit, Huobi (launched on September 1), LedgerX and OKEx. The scope of Ethereum options statistics is Deribit and OKEx.
In the past week, Bitcoin options transactions also rebounded slightly, increasing by 5% from the previous month to US$961 million.
Bitcoin options daily trading volume, source: Skew
It is worth noting that CME’s weekly trading volume surged by nearly 300% month-on-month to US$124 million, and Bit.com’s trading volume also increased by nearly 50% month-on-month to US$108 million, accounting for 11%. The trading volume of Huobi Options was approximately US$4 million three days after its launch. At the same time, the one-week trading volume of Deribit, which had previously occupied 85% to 92% of the market share for a long time, decreased by more than 15% from the previous month, and its share of trading volume fell to 66%.
In addition, the weekly trading volume of Ethereum options also increased by nearly 10% from the previous month to US$2.29 billion.
Daily trading volume of Ethereum options, data source: Skew
Open positions
The open position of Bitcoin options decreased by more than 27% on August 28 (the last Friday of August), and recovered nearly 14% as of September 3 to US$1.675 billion.
Open positions in Bitcoin options, source: Skew
After falling by nearly 20% on August 28, the position of Ethereum options rapidly surged to US$544 million on September 1st, continuing to a record high. As of September 3, the value dropped slightly to 480 million US dollars.
Open positions of Ethereum options, source: Skew_
Bitcoin volatility
Bitcoin’s one-month realized volatility gradually rebounded after hitting a 15-month low (23%) at the end of July, and has so far rebounded slightly to 57%. The implied volatility of one-month at-the-money option (ATM) hovers between 50% and 60%.
From left to right are the realized volatility of Bitcoin one month and the implied volatility of Bitcoin one month ATM
As of September 3, Ethereum has achieved a one-month volatility increase to 93%, a record high in nearly four months. The implied volatility of a one-month at-the-money option fluctuates around 80%.
From left to right are the one-month realized volatility of Ethereum and the one-month ATM implied volatility of Ethereum
For option traders, market volatility is very important, but please note that the so-called option volatility actually has nothing to do with the price of the option, but reflects the price change of the option against the underlying asset. The realized volatility is the standard deviation of the price fluctuation range of the underlying asset in the past period of time calculated by the variance formula, and the implied volatility is the result calculated by the BS formula. Implied volatility measures market expectations of future volatility. An increase in implied volatility means a corresponding increase in the time value of the option, and vice versa means a decrease in the time value. In other words, if the volatility can be predicted more accurately, then you only need to buy when the volatility is high and sell when the volatility is low, and you can achieve better returns.
Option expiration
On September 25 (quarterly delivery day), 64,900 Bitcoin option contracts will expire, with a nominal value of over US$678 million.
Bitcoin option expiration, source: Skew
In terms of Ethereum options, 395,000 contracts will expire on the last Friday of September, with a notional value of more than US$156 million. 430,000 contracts will expire on the last Friday of December.
Ethereum option expiration status, source: Skew
