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Implied volatility soars as open interest for offenders falls, new Bybit report reveals By Chainwire

Implied volatility soars as open interest for offenders falls, new Bybit report reveals By Chainwire

Dubai, United Arab Emirates, September 6, 2024, Chainwire

Bybit, the world's second-largest cryptocurrency exchange by trading volume, has released its latest… Block Scholes Cryptocurrency Derivatives Analysis Reportwhich offers critical insights into the current state of the cryptocurrency market. This week’s report delves into macroeconomic events, trading signals, and the ongoing shift in sentiment within the cryptocurrency derivatives space, highlighting the significant rise in implied volatility and growing bearish outlooks across the board.

Following last week’s drop in spot prices, implied volatility has spiked across the major cryptocurrencies’ term structure, particularly for ETH, where volatility on short-term 7-day options has matched that of long-term contracts. The derivatives market is leaning towards out-of-the-money (OTM) puts for short-term options, indicating bearish sentiment as spot prices remain subdued.

Key findings from the report include:

Perpetual open interest falls:Open interest in perpetual contracts rose sharply following the early August sell-off, but has been steadily declining since. Trading volumes have followed suit, suggesting declining market sentiment as volatility persists.

SOL funding rates turn negative:SOL has entered a period of consistently negative funding rates after posting a positive return in late August. This is in contrast to other tokens such as CRV, which has maintained positive rates, and TON, which turned negative following the arrest of Telegram’s CEO.

BTC put options outperform call options:Bearish sentiment is strong in BTC options markets, with put options now showing more open interest than call options. This trend is also reflected in ETH, although call options remain slightly ahead, suggesting more cautious optimism in Ether markets.

The report also highlights that short-term pessimism is increasing as fewer traders roll over their call options after the August contracts expire. As spot prices remain weak, this trend reflects broader market skepticism regarding positive price action in the near future.

Users can download the full Block Scholes Crypto Derivatives Analysis Report today for more detailed insights.

#Bybit / #ElArcoCrypto

About Bybit

Bybit is the world’s second-largest cryptocurrency exchange platform by trading volume, serving over 37 million users. Founded in 2018, Bybit offers a professional platform where cryptocurrency investors and traders can find an ultra-fast matching engine, 24/7 customer service, and multilingual community support. Bybit is a proud partner of the reigning Formula One constructors’ and drivers’ champions – the Oracle (NYSE:) Red Bull Racing Team.

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This article was originally published on Chainwire