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Sharp Bitcoin price move brewing as BTC volatility falls to a 16-month low

Published 10/17/2020, 04:52 PM
Updated 10/17/2020, 06:40 PM
Sharp Bitcoin price move brewing as BTC volatility falls to a 16-month low

Sharp Bitcoin price move brewing as BTC volatility falls to a 16-month low

Bitcoin (BTC) options aggregate open interest has increased to $2 billion, which is 13% below the all-time high. Although the open interest is still heavily concentrated on Deribit exchange, the Chicago Mercantile Exchange (CME) has also reached $300 million.

In simple terms, options derivatives contracts allow investors to buy protection, either from the upside (call options) or downside (put options). Even though there are some more complex strategies, the mere existence of liquid options markets is a positive indicator.

3-month options contracts implied volatility. Source: Skew
Bitcoin futures contracts aggregate open interest. Source: Skew
Apple (NASDAQ:AAPL) 90-day implied volatility. Source: Alphaquerry.com
Perpetual futures funding rate. Source: Digital Assets Data

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