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Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.
Front-end volatility for BTC has reacted to recent spot price fluctuations, leading to a new all-time high (ATH) of $111.8K, the first since January 20, 2025. At-the-money implied volatility is between 45% and 50%, with short-tenor volatility rising from last week's lows. Perpetual funding rates remain stable, even as spot prices climb, though options skew steepened towards calls by 7% due to increased demand for OTM calls.
In perpetual swaps, open interest hit a new May high over $11B, reflecting stronger risk-on sentiment than in April. For ETH, short-tenor options retain their volatility premium compared to longer-tenor options, while OTM calls continue to show solid support, despite a slowdown in the recent surge of ETH’s spot price.
Please check out the report’s highlights.
ETH open interest has started to rise this week, aligning with BTC surpassing its January ATH of $111K, positively affecting the crypto market, including Ether (+4.5%). However, the increase is slower than last week’s 50% surge in ETH's spot price. Total open interest and perpetual trading volume across nine tokens reached monthly highs of over $11B and $26B, respectively. On May 19, 2025, perpetual trading volumes surpassed $20B after Moody's downgraded US debt. BTC, like risk-on US equities, initially fell but quickly recovered its intraday losses.
Mid-May volatility expectations declined as BTC traded sideways between $102K and $104K. Recently, this range extended to $108K due to a tariff détente between the US and China, though macro uncertainties like the downgrade of US treasuries limited a full breakout. However, regulatory advances helped BTC surpass $110K. This tug-of-war has led to reactive front-end volatility, with implied volatility levels for BTC between 45% and 50%. Options volumes remain skewed toward puts, despite the spot price entering price discovery, with open interest also dominated by puts at $200M.
What’s more, the skew of BTC volatility smiles has steepened significantly, as OTM calls trade at a higher implied volatility compared to puts across all tenors, with the one-week tenor put-call skew briefly exceeding 7% before coming back down.
After two weeks of ETH outperformance, it now lags behind BTC. While ETH's one-month returns are an impressive 69%, its seven-day increase has been lower, largely due to BTC's recent rally. The inversion in its term structure of volatility persists, with short tenors holding a premium over longer tenors. ETH's put-call skew is now significantly less bullish than last week, though it still shows a 5% skew for OTM calls. The dominance of call options in volumes and open interest has narrowed, with open interest in calls only $30M greater than in puts.
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