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ETH Options Open Interest Reaches Record High as ETH/BTC Breaks Out

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The aggregated open interest (OI) across exchanges in the ethereum (ETH) options market reached a record high on Wednesday of USD 7.76b, suggesting that more sophisticated traders are positioning themselves for major moves in the second largest cryptocurrency.

The USD 7.76b figure was recorded by crypto derivatives tracking site Coinglass as the highest ever, rising above the previous all-time high from May 12 this year of USD 7.4b.

The figure represents more than a doubling from USD 3.8bn just two months earlier, and shows that the options market is becoming a more popular way for traders to gain exposure to price moves in ETH.

ETH options open interest:

Source: Coinglass

The record high comes at a time when many traders are expecting a sharp move higher in ethereum relative to bitcoin (BTC). It also coincides with a technical break-out on the ETH/BTC chart, as discussed by many crypto traders in recent days.

The break-out was as recently as Monday dismissed by the popular crypto trading educator and Crypto-TA.nl founder Crypto_Ed, who said on Twitter: “All I see is a rising wedge with bearish divergence and it looks more like it’s gonna break down.”

However, the trader changed his stance on the subject, writing a day later that the pair is indeed breaking out higher.

“[It] looks like I underestimated ETH’s strength,” Crypto_Ed wrote, before adding “Now do a retest and break that [Relative Strength Index – RSI] trend and we can be full bull (for those who weren’t yet)”.

For bitcoin, on the other hand, open interest was still below its all-time high, and is currently sitting at USD 12.57b, down from USD 15.72bn reached on October 20 this year.

BTC options open interest:

Source: Coinglass

USD 6.35bn options contract expiry incoming 

Meanwhile, data also showed that a large number of bitcoin options contracts are set to expire at the end of this year.

According to Coinglass, the options contracts set to expire on December 31 across all exchanges make up BTC 112,310, worth more than USD 6.35bn at current prices, with the vast majority being bullish call options.

BTC options open interest by expiry date:

Source: Coinglass

A similar picture was also seen in the market for ethereum options, although bearish put options made up a larger share of the overall open interest in this market.

ETH options open interest by expiry date:

Source: Coinglass

And although major expiration dates in the past have for the most part been business as usual for both the BTC and ETH markets, increased volatility have on occasions been seen around major expiration dates.

Commenting on the upcoming expirations and the potential for it to impact bitcoin prices in December, a user on Reddit’s r/CryptoCurrency subreddit wrote that we could see “a decent chunk of shorts” being liquidated by the end of the month.

“[…] the end of the year can be pretty crazy, the run up in 2017 to USD 20,000 happened incredibly fast so definitely watch for something to pop off around this time or early January,” the user further wrote, adding that “there’s a lot of money staked the next 2 months.”

A similar sentiment was also shared by Mira Christanto, a senior research analyst at Messari, who wrote on Twitter today that December has historically been “a great month for bulls.” She also shared a chart that showed bitcoin’s historically strong performance during the month.

At 11:45 UTC on Thursday, BTC traded at USD 56,306, down by 0.9% over the past 24 hours and 1.4% over the past 7 days. Meanwhile, ETH stood at USD 4,538, down 3.6% for the past 24 hours and up 6.3% for the week.


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