Bitcoin Options Open Interest Nears All Time High – But Rise in Puts Could Presage Drop

While soaring open interest can be a sign of a continuing trend, the offloading of calls suggests bitcoin could correct further.

AccessTimeIconAug 21, 2020 at 10:48 a.m. UTC
Updated Sep 14, 2021 at 9:46 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

While open positions in bitcoin (BTC) options have risen to near record-high levels, it's not necessarily a good thing for those hoping for the rally in the cryptocurrency to continue.

  • The total number of outstanding BTC options contracts – or open interest (OI) – increased to $2.10 billion Thursday – just shy of the all-time high of $2.11 billion in late July, per data from Skew. 
2020-08-21-11-22-47
  • On its own, high open interest can indicate existing trends are likely to be sustained – suggesting BTC's recent rally from $10,650 could continue.
  • But the number of bearish puts relative to bullish calls has recovered from -10.3% to -3% in the past four days. As the graph below shows – traders are offloading much of their call options onto the market.
Bitcoin options' positioning since 00:00 UTC
Bitcoin options' positioning since 00:00 UTC
  • This suggests bullish speculation is beginning to ease – a sign of investors anticipating consolidation or price drop
  • Indeed, BTC has already pulled back more than 5% from the 13-month high above $12,400 it reached on Monday. 
  • Unless buying action comes quick, downwards momentum could push prices down to $11,000, QCP noted earlier this week.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.