Glassnode data analyzed by CryptoSlate showed significantly higher open interest calls for Bitcoin and Ethereum.

Calls and puts refer to the purchase and sale, respectively, of options. These derivative products give holders the right, but not the obligation, to buy or sell the underlying asset at some future time for a predetermined price.

This predetermined price is also called the strike price; Together with the spot price, it determines the “money” of the option.

Calls, where the strike price is lower than the spot price, are “in the money” as traders can buy the option for less than the market price and sell immediately. Similarly, put options where the strike price is higher than the spot price are “in the money” since traders can sell the option above the market price.

Being “out of the money” occurs when call options have a strike price above the market price or put options have a strike price below the market price.

The spread of call and put options across different strike prices provides a general indicator of market sentiment while also providing insight into traders’ expectations for future prices.

Bitcoin open interest

Bitcoin’s Q1 2023 open interest by strike price showed significantly more calls than puts, suggesting growing bullish sentiment among options traders.

Bitcoin is favored in the $15,000 to $20,000 range, where the call and put options are roughly equal. This is to be expected given that since the FTX crash, BTC has traded within this general price band.


Ethereum open interest

Q1 2023 Ethereum Open Interest by Strike Price showed the clear dominance of calls, adding to the bullish sentiment narrative.

Ethereum is generally considered to have a higher beta than Bitcoin. However, in a risk averse environment, this may not be the case.

It was noted that the most critical calls were for $3,500 and $4,000, to 150,000 and 200,000, respectively.

open interest options

As the first week of 2023 draws to a close, uncertainty remains the main theme. Other macroeconomic headwinds could add to the stagnation of cryptocurrencies, dashing the expectations of options traders.

Posted in: Bitcoin, Research

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