Bitcoin options open interest hit a new all time high, adding to the signs that the digital asset market has been revitalised with more retail and institutional interest across the board.
According to data from Glassnode, open interest on put and call options reached $17.73 billion on Friday, surpassing a high from earlier this year and the peak recorded during the 2021 bull run.
#Bitcoin options just surpassed peak open interest from 2021 👀
enforcing our thesis that watching options flows and positioning is increasingly important pic.twitter.com/JIB9YQITeY
— Kelly Greer (@kellyjgreer) October 26, 2023
Open interest refers to the number of outstanding futures or options contracts on a derivatives exchange. Together with trading volume, the metric can be a useful indicator of market activity and sentiment, particularly with respect to the level of risks investors are comfortable with at the moment.
There’s reason to believe that much of this recent open interest activity has been driven by institutional investors, given the 20,000 contracts or $3.4 billion of exposure recorded on the Chicago Mercantile Exchange (CME) in recent days.
Same for futs https://t.co/255SxodjqV
— Will Clemente (@WClementeIII) October 28, 2023
According to some market participants, the renewed interest in the options market could imply impending positive price action for Bitcoin in the coming months.
“We can make this assumption based on the call-to-put ratio, where the number of “calls” exceeds the total number of “puts” in the options market,” said one technical analyst on X.
At the time of writing, Bitcoin was trading at $34,275, gaining around 1% in the last 24 hours.