Bitcoin continues hauling and pushing to climb above the $8,000 mark. The coin lost its $8,000 support at 4:08 am UTC on 9 March. Meanwhile, the Bitcoin Options trading volume crossed $198 million on the same day.
As reported by Skew, this is the highest options trading volume since 11 Feb 2020 when $171.3 million BTC options were traded.
All time high for bitcoin options volumes yesterday with nearly $200mln trading pic.twitter.com/dwS2hlqbnl
— skew (@skewdotcom) March 10, 2020
What does this mean?
On the basis of data recorded by Skew, the implied volatility for Bitcoin over one month has gone up. Furthermore, the volatility percentage has risen from 55% to 65%. And the Bitcoin veterans seem to be milking the growing volatility.
"One-month implied volatility for the bitcoin has increased from 55% to 65% since Sunday at midnight, according to data provided by @skewdotcom." pic.twitter.com/WQMxWWtUCv
— Frank Chaparro (@fintechfrank) March 9, 2020
The jumps in option trading volumes suggest an intense movement is just around the corner. The Skew report does not indicate whether the Options contracts called or puts. However, this does indicate the Bitcoin price wilder swings are on the way.
If Called
An investor buying a call option speculates the Bitcoin price is about to increase significantly. Thus if more call options were bought in the $200 million trading volume, we might not be far from a bull run.
If Puts
An investor buying puts is speculating a bearish trend, and an investor chooses to buy a puts option to sell at a strike price. If more Puts options were bought, we might see a short bearish trend. However, that might not last long as halving is just 58 days away.
We have more reasons to believe that the investors might have bought more Puts. The BTC short-dated skew has shown some positive growth after 2 months negative period. Moreover, this is a clear indicator that the investors are focusing more on downside protection.
BTC short-dated (1mth) skew back in positive territory after about 2mths negative, indicating increased demand for downside protection on BTC. pic.twitter.com/n6nIescPT7
— skew (@skewdotcom) March 9, 2020
Whichever way the Bitcoin price swings, the options trading volume might register even higher volumes. And this is because of the global financial volatility, the spread of coronavirus and price speculations around Bitcoin halving.
Enormous volumes: Deribit and OKEx
Deribit stole the show by contributing close to $158 Million out of the entire trading volume. The next major contributor was OKEx that contributed nearly $25-30 million.
Unfortunately, Bakkt and CME Group are yet to perform well.
Another asset records are all-time!
Following the king coin options trading is the Ethereum futures trading. On 9th March, It recorded all-time high futures trading volumes of nearly $6 Billion. And this is a new record. While BitMex contributed the highest out of the lot with $816 Million, it was Binance that exhibited explosive growth in its trading volumes.
Previously, we covered why this Bitcoin dip looks perfectly normal.
