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Bybit and analytics firm Block Scholes released a derivatives market report indicating mixed signals regarding Ethereum and Bitcoin.
The report highlights the decline in the value of Ethereum (Ethereum) Perpetual open interest, primarily due to the liquidation of over-leveraged long positions. These positions had built up during a period of optimism but were reset by a decline in Ethereum spot prices, according to the report shared with crypto.news.
The report also notes that ETH futures did not see the same decline in open interest as ETH perpetual swap contracts during a brief pause in upward price momentum. However, the positioning of both has increased (Bitcoin) and Ethereum.
Despite this rise, the total volume of open positions has not yet recovered from the expiration of contracts worth approximately $20 million at the end of November 2024. This suggests that traders who held contracts expiring in November are not returning to the market in the same volume. . In contrast, Bitcoin standing positions have remained stable, even after the recent pullback from the high above $100,000.
Perpetual swaps are a type of derivative contract that enables traders to speculate on the price of an asset without owning it. They are widely used in cryptocurrency markets, but unfavorable price movements can force leveraged traders to liquidate, reducing market activity.
ETH outperforms BTC in options, driven by volatility
The report reveals that Ethereum continues to outperform Bitcoin in options open interest, especially as expiration approaches at the end of the year. However, trading volumes declined, reflecting a general sense of caution in the market.
The options term structure for ETH shows higher realized volatility compared to future expectations, indicating a difference in sentiment from BTC, which displays a flatter term structure.
