Bitcoin (BTC) and Ethereum (ETH) options are gaining popularity among traders and open interest is rising to record highs. What does this herald?
Bitcoin and ETH options reach a new milestone
The first quarter of 2023 has been quite surprising for crypto investors after the tough crypto winter of 2022. Bitcoin, the market leader, has gained over 70% in the last three months, while Ethereum has also gained about 50%. In addition to these massive spot price increases, there has also been record interest in trading activity for BTC and ETH options. CME Group data shows that both contracts have reached a new milestone.
As of March 27, open interest rates reached a record 15,089 contracts. The estimated total number of contracts for the first quarter of 2023 is 32,000 with a monthly average of approximately 10,666.
When we compare the annual growth, the average open interest of BTC and ETH was around 2,000 at the end of the first quarter of 2022. Therefore, there is an annual growth of 430%.
The growing interest in options coincides with the overall positive trend and broader market recovery in the crypto market. Since January 1, 2023, the broader crypto market has increased by 32%, adding a total of $373.07 billion and now surpassing $1.19 trillion. But despite this strong recovery, total market cap (TOTAL) is still more than 45% lower than its $2.16 trillion peak in the first quarter of 2022.
More rise in Bitcoin price expected?
BTC price rose as high as $29,000 with a strong movement in the first days of the week. However, it failed to break the $28,600 resistance levels. If BTC price breaks this resistance, it will gather strength again to head towards the $29,000-32,000 range.
However, one metric that investors can watch closely is the correlation between Bitcoin and Ethereum prices. As the chart below shows, so far in 2023 Bitcoin has by far surpassed Ethereum. In the first quarter of the year, the price of BTC increased by more than 70%, while Ethereum (ETH) recorded an increase of close to 50%.
Market players see the correlation between these two cryptocurrencies as an important factor that moves the market forward. As of March 31, average trading volumes for BTC and ETH stood at $19.7 billion and $8.4 billion, respectively. There are many factors that will determine the price movements of leading cryptos in the next quarter.
Macro developments to follow in the quarter ahead
Among the main developments to follow in the second quarter of 2023, global macro developments and the Fed’s stance on monetary tightening measures will include various factors. cryptocoin.comAs you follow in , market experts expect the Fed to soften its interest rate policies. Meeting dates are as follows:
- 2-3 May 2023
- 13-14 June 2023
- 25-26 July 2023
- 19-20 September 2023
- 31 October – 1 November 2023
- 12-13 December 2023
- 30-31 January 2024
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