PakGazette — Bybit, the world’s second largest cryptocurrency exchange by trading volume, has partnered with Block Scholes to publish its latest crypto derivatives analysis report. The report provides insights into market behavior and open interest trends during the important year-end options expiry for (BTC) and (ETH).
The report revealed that open interest in BTC and ETH perpetual swaps remained stable during the critical year-end options expiry, despite not returning to the highs seen in early December 2024. This stability indicates that Traders did not rely heavily on perpetual contracts to hedge the delta of expired options, which contributed to the moderate volatility during this period.
Trading volumes fell during the winter holiday season, coinciding with a drop in realized volatility, which reached its lowest levels in December. Despite the December options expiration, there was no increase in volatility as expected. Instead, observed volatility fell to the lower end of its recent range.
The implied volatility term structure for BTC options remains steep, with longer-term implied volatility around 57% and 1-week at-the-money options trading about five points lower. Most of the expired open interest has not been reinvested, maintaining a neutral buying and selling balance.
As a result, the BTC options market shows limited leverage compared to its position at the beginning of December 2024, indicating a cautious sentiment.
Despite the substantial expiration of ETH options at the end of December 2024, market dynamics remained stable. An increase in volatility seen in December did not carry over into the new year, and the ETH spot price is currently showing lower volatility compared to short-term implied volatility.
Over the past week, the implied volatility term structure for ETH options changed, rising briefly before flattening again, diverging from BTC’s consistently steep profile. This pattern suggests that the ETH options market is preparing for potential short-term volatility in spot price movements.
Interestingly, call options for ETH gained momentum in early 2025, dominating the market and indicating a bullish outlook among traders.
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