Positivity in Derivatives Market Despite Spot Price Decline in September

Dubai, United Arab Emirates, October 4th, 2024

Bybit, the second-largest cryptocurrency exchange globally by trading volume, has partnered with BlockScholes to release an insightful report that analyzes movements in the derivatives market and highlights a positive underlying sentiment.

Recent data indicates that short-term options have begun to align with long-term volatility trends, consistently favoring out-of-the-money (OTM) calls. Overall sentiment in the derivatives market remains robust, which is coinciding with the volatility premium associated with the upcoming U.S. presidential election for options expiring after November 5, 2024, as well as a recent decrease in spot prices throughout September.

Key Highlights:

• Futures: The increase in trading volume at the end of September was primarily focused on BTC contracts, resulting in a significant drop in open interest as traders chose not to close their positions but instead rolled them over. The data indicated that activity in futures was markedly lower compared to perpetual swap markets.

• Perpetuals: The round of contract expirations in September had a minimal effect on perpetual swap contracts. While there was a decline in perpetual open interest at the month’s end, this did not indicate a substantial drop, especially given the positive trading volumes recorded in the final days of September.

• Options: The impending U.S. election continues to influence market movements, particularly affecting BTC options. The volatility expectations for longer-term and short-term options prior to the election varied, while actual volatility has reached new lows for the month following the Federal Reserve’s interest rate cut.

As October begins, the first week of the fourth quarter reveals patterns indicative of a shifting sentiment. However, BTC spot prices indicate that sentiment is just one of many factors influenced by broader macroeconomic conditions.

About Bybit:
Bybit is a leading cryptocurrency exchange established in 2018, serving over 50 million users. The platform offers a professional trading environment with a fast matching engine, round-the-clock customer support, and multilingual community assistance. Bybit proudly partners with the Oracle Red Bull Racing team, the reigning champions in Formula One. For media inquiries, please contact the Head of PR, Tony Au.