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The price of Bitcoin (BTC) failed to hit the $ 20,000 level this week, but several volume and open interest related records were made up to $ 19,484. A notable achievement was the open interest on aggregate futures which reached $ 7.4 billion on derivative exchanges.
As noted above, there has been a 110% increase in the past 6 months, and it’s also worth noting that the Chicago Mercantile Exchange (CME) now holds over $ 1.1 billion of these contracts. These data are compelling evidence of the growing institutional participation in BTC markets.
Volume hit new highs, will BTC price follow?
The total volume of the cryptocurrency market also reached an all-time high on November 24. Some investors may infer that this is a bullish event, but it is important to remember that every trade has a buyer and a seller. So how can the entry of big sellers be considered bullish?
The total volume of each spot exchange reached $ 285 billion this week, but it is still possible that some of these exchanges have inflated their volumes. Despite that, $ 285 billion is an 11% increase from the March 13 high.
Bitcoin options markets also set a new high of open interest yesterday. These are the contracts that a buyer pays in advance to buy (call) or sell (put) at a predetermined price in the future.
Note that the current open interest of $ 5 billion in BTC options represents a 316% increase from the level of $ 1.2 billion six months ago. While this includes both put and call options, this impressive increase in liquidity is a positive event.
The open interest of options deserves special attention
Higher open interest tends to draw attention to new arbitration offices and open houses for larger institutional clients. Nonetheless, to better assess how professional traders rate to continue the current bull run, one needs to analyze the 25% delta bias options.
A positive delta bias of 25% indicates that puts (puts) cost more than similar calls, indicating bearish sentiment. On the other hand, a negative bias suggests an uptrend.
The chart above shows that the November 24 figure of -27.5% is practically its all-time low. Undoubtedly, this is an extremely bullish condition and the data indicates that options traders are unwilling to sell upside protection.
Therefore, even though the $ 20,000 level has yet to be crossed, there is enough reason to celebrate a healthy market without any sign of excessive leverage or diminishing investor interest.
The views and opinions expressed herein are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You need to do your own research when making a decision.
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