CME Bitcoin futures reached a two-year high with open interest hitting $3.65 billion on Nov. 1. This metric considers the value of every contract in play, where buyers and sellers are matched.
The number of active large holders hit a record 122 during the week of Oct. 31, signaling institutional interest. The Bitcoin CME futures premium reached its highest level in over two years, standing at a 15% premium, suggesting a strong demand for long positions.
However, Bitcoin options markets reveal a demand for protective put options, with the put-to-call open interest ratio at Deribit reaching its highest levels in six months.
Despite bullish CME futures, evidence from options markets shows a demand for protective put options. For instance, the put-to-call open interest ratio at Deribit reached its highest levels in six months.
Bitcoin’s price relies on spot exchange flows, and a rejection at $36,000 on Nov. 2 led to a 5% correction. The Bitfinex exchange experienced daily net BTC inflows of $300 million during this movement.
The recent correction occurred while the Russell 2000 Index futures gained 2.5%, suggesting Bitcoin’s movement was unrelated to the U.S. Federal Reserve’s decision.
The price of gold remained stable, indicating it was not affected by the monetary policy announcement. The question remains: how much selling pressure do Bitcoin sellers at $36,000 still hold?
Reduced Bitcoin availability on exchanges can be deceiving. Assessing current deposits doesn’t provide a clear picture of short-term sale availability, as lower deposits may reflect lower investor confidence in exchanges.
Legal challenges against exchanges and the FTX-Alameda Research debacle have raised concerns among investors. Increased returns from traditional fiat fixed-income operations have impacted the cryptocurrency market.
There is growing institutional demand for Bitcoin derivatives, but predicting the supply between $36,000 and $40,000 is challenging. This level hasn’t been tested since April 2022.