Has the turning point come? Derivatives holdings and transactions fell after the sharp drop | Crypto Derivatives Weekly Report

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Bitcoin futures trading volume fell by more than 34% in a week, options trading volume decreased by nearly 40%, and both futures and options holdings decreased by 15%.

Written by: Karen

Weekly market dynamics

  1. Bit.com lists BCH perpetual contract and will list BCH options on February 1.
  2. OKEx has launched BTCUSD and ETHUSD currency-based perpetual, delivery and real-time settlement functions for option contracts.
  3. Deribit launched an Ethereum option product with an exercise price of US$20,000.
  4. Binance Futures launched the CHZUSDT perpetual contract.

Futures market

Overview of extreme market liquidation

In the two hours after Bitcoin fell by more than two thousand US dollars to 28,800 US dollars this morning, the whole network broke out nearly 400 million US dollars. On January 21, Bitcoin fell by nearly US$3,000. On that day, the entire network liquidated nearly US$800 million, Bitcoin liquidated US$559 million, and Ethereum liquidated US$131 million.

BitMEX, Binance, Bybit, Huobi and OKEx 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.

As Bitcoin fell sharply, Bitcoin’s weekly trading volume broke the record of five consecutive weeks of rising. In the past week, it fell by more than 34% to 398.8 billion US dollars. Although the trading volume is still at a high level, the decline in trading popularity deserves investors’ attention.

| Crypto Derivatives WeeklyBitcoin futures contract trading volume, source: Skew

Ethereum transaction volume also fell slightly by nearly 8%, with a weekly transaction volume of 170.2 billion US dollars.

| Crypto Derivatives WeeklyEthereum futures contract daily trading volume, source: Skew

Open positions

After the value of Bitcoin futures holdings continued to hit a record high (nearly 13 billion U.S. dollars) on January 14, the value of Bitcoin holdings stopped rising and falling in the past week. As of January 21, it was 10.727 billion U.S. dollars, a decrease of over 15% from a week ago. .

| Crypto Derivatives WeeklyOpen positions in Bitcoin futures contracts, source: Skew

Although the open position of Ethereum futures hit a record high on Tuesday (January 19), reaching 4.4 billion US dollars, as of January 21, it had fallen back to about 3 billion US dollars. The increase in the first half of the week was basically met. Take it all.

| Crypto Derivatives WeeklyOpen positions in Ethereum futures contracts, source: Skew

Funding rate

Affected by the decline in the market, the funding rate of Bitcoin perpetual contracts has dropped significantly. The weekly average funding rate of BitMEX and Huobi has both dropped from nearly 0.06% to about 0.03%. The weekly average funding rate of Binance and Bybit has both decreased from 0.08% fell to around 0.05%, which means that the proportion of multiple positions held by perpetual contracts has dropped significantly.

| Crypto Derivatives WeeklyComparison of Bitcoin Perpetual Contract Funding Rates of Various Exchanges

Option market

Trading volume

The scope of Bitcoin options statistics includes Bakkt, Bit.com, CME, Deribit, Huobi, LedgerX and OKEx. The scope of Ethereum options statistics is Bit.com, Deribit, Huobi and OKEx.

The trading volume of Bitcoin options has also seen a significant decline. The weekly trading volume has decreased by nearly 40% from the previous month to 5.992 billion US dollars. Among them, the trading volume of CME has tripled last week and has fallen by more than 74% in the past week.

| Crypto Derivatives WeeklyBitcoin options daily trading volume, source: Skew

Contrary to Bitcoin’s transaction performance, Ethereum’s weekly trading volume increased by 4.35% from the previous month to 1.072 billion US dollars.

| Crypto Derivatives WeeklyEthereum options daily trading volume, source: Skew

Open positions

Bitcoin’s open position has also fallen from last week, with a month-on-month decrease of 15%, reaching 8.936 billion US dollars as of January 21.

| Crypto Derivatives WeeklyOpen positions in Bitcoin options, source: Skew

The value of Ethereum holdings decreased by less than 9% from a week ago, to 1.661 billion US dollars, which is still at a historical high.

| Crypto Derivatives WeeklyOpen positions in Ethereum options, source: Skew

Volatility

As mentioned in the weekly report last week, the recent realized volatility and the continuous increase in the implied volatility of one-month at-the-money options can be considered a risk signal for the market. Bitcoin’s one-month realized volatility rose from 95% last week to the current 102%, but the implied volatility fell slightly from 137% to around 115%.

| Crypto Derivatives WeeklyFrom left to right are the realized volatility of Bitcoin one month and the implied volatility of Bitcoin one month ATM

The one-month realized volatility of Ethereum also rose sharply from 133% to the current 153%, and the implied volatility of one-month at-the-money options dropped from about 170% to 152%.

| Crypto Derivatives WeeklyFrom left to right are the one-month realized volatility of Ethereum and the one-month ATM implied volatility of Bitcoin

In general, the popularity of Bitcoin futures and options trading has declined to a certain extent. In addition, although the position data of Bitcoin and Ethereum are still at a high level, in terms of growth rate, the exponential growth in the past few months has become a slow rise or a decline. Investors need to pay close attention to the trading heat and position status in the next one to two weeks to determine whether there will be a reversal signal.

Option expiration

Today, 34,400 Bitcoin option contracts will expire with a nominal value of more than US$1.077 billion. On January 29, there will be 118,000 contracts with a nominal value of more than US$4 billion.

| Crypto Derivatives WeeklyBitcoin option expiration, source: Skew

In Ethereum, 123,300 contracts will expire today, with a nominal value of nearly 147 million US dollars, and 325,500 contracts will expire this Friday, with a nominal value of 387 million US dollars.

| Crypto Derivatives Weekly

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