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According to data from The Block’s Data Dashboard, open interest in Bitcoin options traded at CME has reached an all-time high. In the last 24 hours, open interest in CME Bitcoin futures options has reached nearly $2 billion in unsettled contracts. So, how might this situation reflect on Bitcoin’s price? Let’s take a look.
New Record in Bitcoin Open Interest
Data on the subject observed by blockchain data analysis platform Velo Data shows that open interest in CME Bitcoin futures options has reached $2.1 billion. The increase in open positions points to a market with high liquidity and a large number of participants.
This data represents the total number of option contracts that have not yet been used. An increase in open positions indicates an increase in sophisticated trader activity, with new contracts being introduced and added to existing ones.
Data from blockchain data analysis platform Coinglass shows that open interest for options expiring at the end of December is leaning more towards sales than purchases, with 65% long positions compared to 35% short positions. When the volume of long positions exceeds that of short positions, this is interpreted as a bullish indicator.
Noteworthy Comments on the Subject
The expiration of CME Bitcoin futures options coincides with the last Friday of the month, the same day as the underlying Bitcoin futures contract. According to data from Coinglass, the trading volume of Bitcoin futures transactions at CME has reached $41 billion so far in December. Analysts from Bitfinex commented on the subject:
“Futures market traders are increasing their bets on interest rate cuts, predicting a drop in the benchmark interest rate as early as March and further decreases throughout the next year.”
This prediction put forward by analysts is consistent with data from the CME FedWatch tool, which sets the probability of the Federal Reserve lowering interest rates by 25 basis points in March 2024 at 66.7%.
