With election uncertainty now behind, the report shows that traders are leaning strongly toward leveraged long positions, especially in perpetuals and futures contracts. Short-term volatility has decreased, and BTC's price structure has leveled out, suggesting a more stable market. The steady trading activity over the weekend further highlights the ongoing strong interest in crypto assets.
Key Findings:
- Sharp Decline in Short-Term Volatility: As election uncertainty cleared, short-term implied volatility for both BTC and ETH witnessed a significant drop.
- Flattening of BTC Term Structure: While the term structure for BTC flattened, ETH's evolved into a steeper curve, potentially reflecting increased long-term uncertainty surrounding Ethereum.
- Resurgence of Leveraged Positions: Following a pre-election reduction, leveraged positions have bounced back strongly. Open interest in both perpetuals and futures contracts has climbed, indicating a willingness to embrace risk once again.
- Record High Positioning: Despite the election risk subsiding, positioning across all markets is near all-time highs, showcasing a keen interest in maintaining leveraged long exposure as BTC reaches new records.
- Robust Trading Volumes: Trading volumes remained robust throughout the week, even over the weekend, highlighting sustained market activity.
- Renewed Interest in Directional Bets: Perpetual swap open interest mirrored the trend seen in futures contracts. A decline during pre-election turbulence was followed by a sharp rise as the election outcome became clear, suggesting renewed focus on directional bets to capitalize on positive post-election movement.
- Increased Options Interest: Despite subdued option trading volumes, open interest for BTC options has surged. This points towards a growing interest in positioning for potential long-term volatility in the aftermath of the election.
Gain deeper insights and explore the potential impacts on your crypto trading strategies by downloading the full report here: https://learn.bybit.com/crypto-insight/bybit-x-block-scholes-crypto-derivatives-analytics-report-nov-6-2024/
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