The latest report of Bybit and Block Scholes indicates that the Bitcoin options market maintained stability against the end of the year, while Ethereum options are ready for short volatility.
According to s report published by crypto exchange Beyond and analytical platform Block Scholes, open interest in Bitcoin (BTC) perpetual swaps remained stable through the end of the year. This stability came as a surprise, as options that are close to the expiration date usually cause price movements.
The report suggests that traders are cautious but confident enough in the stability of their options that they have not relied heavily on permanent contracts to cover the delta of expiring options. As a result, Bitcoin OI has remained relatively stable, despite quiet volatility and not getting back to the December highs.
As before reported by crypto.news, Bitcoin OI futures have fallen below the $60 billion mark. The total BTC OI currently stands at around $56.6 billion, after falling down at the beginning of January 2025. However, it has not fallen as low as the levels of early November, when it down below $40 billion.
The report notes that the implied volatility term structure for BTC options remains steep, with implied volatility expected to remain at 57% over a one-week period for options trading five pips lower.
Most of the expired open interest has not yet been reinvested, resulting in a neutral balance. This indicates that the BTC options market is showing limited leverage compared to its position at the beginning of December 2024.
Similarly, Ethereum (ETH) options remained stable until the end of December 2024. However, the ETH spot price shows lower volatility compared to its short-term volatility.
Over the past week, the volatility term structure of ETH options dipped briefly before leveling off again. Compared to BTC's consistent decline, ETH's pattern suggests that its options market is preparing for possible short-term volatility in spot price movements.
Despite imminent expiration dates, ETH call options have moved significantly at the beginning of 2025. At the time of writing, Ethereum OI is at $25.5 billion, returning to its mid-December levels.
