Encrypted Derivatives Weekly | Futures hedging positions are leaving the market? But the options market throws signs of a rebound

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The futures positions of Bitcoin and Ethereum have fallen for several consecutive weeks, down by nearly 40% from the August peak, and the volume of options both rebounded by nearly 10%. On the last Friday of this month (quarterly delivery day), 72,200 Bitcoin option contracts will expire, with a nominal value of more than US$740 million. Since September, the ratio of Bitcoin options PCR holdings has continued to fall.

Weekly market dynamics

  1. Huobi launches Ethereum options contract.
  2. LedgerX launched a bitcoin mini futures contract settled in physical objects, with the subject matter of the contract being 0.01BTC.
  3. Binance has launched XRPUSD, ETCUSD, TRXUSD and EOSUSD currency-based perpetual contracts.

Futures market

Overview of extreme market liquidation

In the past week (September 4 to September 10), Bitcoin briefly fell below the $10,000 mark several times, and now it fluctuates around $10,200. In the early hours of the 6th, Bitcoin fell by nearly US$400 in half an hour, approaching US$9,800 at one time, and Ethereum once fell to US$308. During the same period of time, the Bitcoin liquidation amount was 24.2 million US dollars, and the Ethereum liquidation amount reached 42.29 million US dollars. The total amount of Ethereum liquidation reached 77 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 trading volume continued the momentum of continuous rebound after a sharp dive two weeks ago. The total futures trading volume in the past week was 88.247 billion US dollars, an increase of nearly 5% from the previous month. Among them, Binance’s weekly trading volume increased by 20% month-on-month.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandi Daily trading volume of Bitcoin futures contracts, source: Skew

Ethereum’s trading volume increased by more than 60% month-on-month last week, and it rose by 2% this week. The total trading volume in the past week was US$51.325 billion. Similar to Bitcoin futures, Binance’s weekly Ethereum trading volume also increased by more than 18% from the previous month.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandEthereum futures contract daily trading volume, source: Skew

Open positions

The open position of Bitcoin futures continued to fall for five consecutive weeks, falling more than 5% in the past week to US$3.733 billion. The current position value is nearly 35% lower than the historical peak ($5.7 billion) on August 17.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandOpen positions in Bitcoin futures, source: Skew

The value of Ethereum holdings has also fallen for four consecutive weeks and has fallen below US$1 billion. As of September 10, it closed at US$989 million, a 41% drop from the historical high in mid-August.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandOpen positions in Ethereum futures, source: Skew

The value of Bitcoin and Ethereum futures positions has gradually fallen from the peak, or represents the exit of short-term hedging or panic positions. In the next one or two weeks, if the data fails to rebound, it means a decline in short-term market confidence.

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, the trading volume of Bitcoin options rebounded by more than 9% to US$1.041 billion.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandBitcoin options daily trading volume, source: Skew

Among them, Deribit’s trading volume increased by more than 20% month-on-month, and its proportion rose from 66% last week to 74% this week. And Bit.com’s transaction volume continued to account for about 10%. The trading volume of the newly launched Huobi Options on September 1 was US$4.491 million in the past week, and the trading volume accounted for less than 0.5%.

Ethereum’s trading volume also rebounded simultaneously. The total trading volume in the past week reached 250 million US dollars, an increase of over 9% from the previous week.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandDaily trading volume of Ethereum options, data source: Skew

Open positions

The open position of Bitcoin options gradually recovered after a reduction of more than 27% on August 28 (the last Friday of August). As of September 10, it was $1.744 billion, an increase of more than 4% from a week ago.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandOpen positions in Bitcoin options, source: Skew

Ethereum option holdings are not much different from a week ago, with fluctuations within 2%.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandOpen positions in Ethereum options, source: Skew

Ratio of PCR open interest

Since September 1st, the ratio of Bitcoin PCR holdings has continued to fall , and so far is 0.68, which means that investors believe that the market is bullish in the short term.

Put/Call Ratio (Put/Call Ratio, PCR) is an indicator used to measure the ratio of bearish calls. If the PCR value is greater than 1, it means that the short is greater than the long; if it is less than 1, the short is less than the long.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandThe ratio of Bitcoin options’ PCR holdings

As of now, the ratio of the PCR holdings of Ethereum options is 0.84.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandThe ratio of the PCR holdings of Ethereum options

Option expiration

In terms of Bitcoin options, nearly 20,000 contracts expire today, with a notional value of more than 200 million U.S. dollars. On the last Friday of the month (September 25, quarterly delivery day), 72,200 contracts will expire, with a nominal value of over US$740 million .

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandBitcoin option expiration, source: Skew

In terms of Ethereum options, 187,100 contracts will expire today, with a nominal value of approximately US$68.1 million. More than 400,000 contracts will expire on September 25, with a nominal value of over US$161 million. 430,000 contracts will expire on the last Friday of December.

Crypto Derivatives Weekly | Futures positions continue to fall, but options suggest a rebound demandEthereum option expiration status, source: Skew