The futures trading volume of Bitcoin and Ethereum has been significantly enlarged. Compared with the historical record of holding positions previously set, futures positions have retracted by 24% and 36% respectively, and options positions have both fallen by about 30%. On March 26, 89,600 Bitcoin option contracts will expire, with a nominal value of over US$4 billion.
Written by: Karen
Weekly market dynamics
BitMEX will launch ADA, DOT, EOS, YFI, UNI and XLM dual currency perpetual contracts in batches in March.
Overview of extreme market liquidation
In the past week, the cryptocurrency market has fallen sharply, with Bitcoin and Ethereum retracing about 22% and 33% respectively from historical highs. On Monday and Tuesday, the entire network liquidated US$3.5 billion and US$2.5 billion respectively. Among them, Bitcoin fell by more than US$10,000 within two days, and a total of US$3.09 billion was liquidated in two days. Ethereum’s biggest drop in two days was 30%, a total of 1.307 billion US dollars was liquidated.
Futures liquidation statistics on BitMEX, Binance, Bybit, Huobi, MXC, OKEx, source: Coin
Trading volume and open positions
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, CME (launched on February 7), Deribit, FTX, Huobi and OKEx.
In the past week (February 19 to February 25), Bitcoin futures’ weekly trading volume hit a record high, reaching 637 billion US dollars. Among them, the trading volume on Monday and Tuesday increased significantly, reaching 138 billion US dollars and 178 billion US dollars, respectively. The strength of the short side has increased, and it is believed that there is still some room for decline, but with the release of the strength of the short side, there is a possibility of backstepping confirmation in the short term.
Bitcoin futures contract trading volume, source: Skew
In addition, the open position of Bitcoin continued to fall after a historical high (around US$19 billion) in mid-February. As of February 27, it had fallen by nearly 24% from the historical high to US$14.5 billion. In the case that the price and the position are falling simultaneously, investors must pay close attention to whether there will be an inflection point in the next few days based on the trading volume and position status.
Open positions in Bitcoin futures contracts, source: Skew
Compared with Bitcoin, Ethereum’s retracement is larger, approaching $1,300 at one time. From the perspective of transaction performance, Ethereum’s weekly trading volume was US$209 billion, which is second only to the first week of January in terms of weekly trading volume. Correspondingly, the open position of Ethereum also dropped by more than 36% from its peak in mid-February, reaching $4.446 billion as of yesterday.
Ethereum futures contract daily trading volume, source: Skew
Open positions in Ethereum futures contracts, source: Skew
Among them, the trading volume of Ethereum futures launched by CME in early February has gradually increased. The average daily trading volume in the first three weeks was US$32.4 million, US$64.6 million and US$103.6 million. As of February 27, CME’s Ethereum futures holdings were US$54 million, and the holdings accounted for 1.21%.
Trading volume and open positions
The scope of Bitcoin options statistics includes Binance, 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 gradually expanded again, with a weekly trading volume of nearly US$9.2 billion, of which Deribit’s trading volume has continued to account for about 87%. As of February 27, options holdings were 9.328 billion U.S. dollars, a retracement of nearly 30% from the historical high on February 20.
Bitcoin options contract trading volume, source: Skew
Open Bitcoin options contracts, source: Skew
For Ethereum, the weekly trading volume was US$1.738 billion. As of February 27, the position held was US$2.125 billion, which was about 30% lower than the historical high in mid-to-late February.
Open positions in Ethereum options contracts, source: Skew
As shown below, Bitcoin has achieved a volatility rate of more than 100% for a month, and the implied volatility rate has dropped from 138% in mid-January to the current 100%. In contrast, the realized volatility of Ethereum in one month has gradually decreased from 160% in early February to the current 100%.
From left to right, one-month realized volatility of Bitcoin and one-month ATM implied volatility of Bitcoin
On the last Friday of March (March 26), 89,600 contracts will expire, with a nominal value of over US$4 billion.
Bitcoin option expiration, source: Skew
In Ethereum, 565,600 contracts will expire on March 26, with a nominal value of approximately US$760 million.
Ethereum option expiration status, source: Skew
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