This week, Bitcoin reached a new record high of $123,000 driven by a surge in derivatives interest and support from institutional investors.
Bitcoin Price Dynamics
The price of Bitcoin surged to $123,000 after hovering around $108,000 for the previous week. After reaching this new peak, the price retraced to $118,000 as large investors began to offload some of their holdings. The open interest in perpetual futures also surged, surpassing $13 billion, marking the highest level in a month.
Options: Traders' Confidence
The sentiment in Bitcoin options swung bullish, hitting an implied volatility of 41% on a 7-day horizon. Although the short-term volatility is low compared to historical levels, the open interest in call options has spiked, almost matching that of puts for the first time in weeks. Meanwhile, Ethereum exhibited an even greater increase, gaining over 20% to exceed the $3,000 threshold.
Solana's Struggles Despite Bullish News
Solana recorded a 9% increase but lagged behind its Layer 1 counterparts. Its funding rates remained less confident, even with significant purchases from major entities. Open positions in SOL options are currently skewed towards calls, but the volatility is lagging against the expected, indicating lower trading activity compared to larger tokens.
While Bitcoin and Ethereum hover around all-time highs, their options markets imply traders are anticipating subdued volatility in the near term. This discrepancy may offer intriguing opportunities for trading strategies, especially if bullish momentum persists.
