United

Swap

Block

Within a few days after the conclusion of the United States presidential elections, investor sentiment in the crypto derivatives market has changed, revealing a major shift towards bullishness and a huge appetite for leveraged long positions.
According to a crypto derivatives analytics<a href="https://learn.bybit.com/crypto-insight/bybit-x-block-scholes-crypto-derivatives-analytics-report-nov-6-2024/" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow"> report</a> by the leading digital asset trading platform Bybit, in partnership with the research and analysis firm Block Scholes, there is increased open interest in perpetuals and futures contracts and a decline in short-term volatility. The report said this change in sentiment has driven positioning in all markets to near-all-time highs.
<h2 id="derivatives-market-turns-bullish">Derivatives Market Turns Bullish</h2>
The state of derivatives markets shows crypto traders believe in a more stable environment and are eager to maintain exposure to leveraged long positions as bitcoin (BTC) reaches new highs. Leveraged positions were reduced while the market experienced volatility due to uncertainty about the election <a href="https://cryptopotato.com/us-presidential-elections-2024-results-donald-trump-declares-victory/" data-wpel-link="internal" rel="noopener noreferrer nofollow">outcome</a>; however, they have recovered as traders are now willing to embrace risk.
<blockquote>
 “Futures open interest surged during election night, as traders swiftly re-entered leveraged positions to take exposure to the rally in spot price. Perpetual open interest rose sharply overnight, continuing the sustained trading volumes activity observed over the weekend as traders seek exposure to further upside price action,” the report stated.
</blockquote>
Perpetual funding rates are also positive, indicating that traders are willing to pay a premium for leveraged long exposure even as BTC has retraced a bit from its new all-time high. This has led to a drop in implied volatility for BTC and ether (ETH) in short-dated options.
Bitcoin’s term structure is currently flat, while ether’s is in a steep curve after two weeks of prolonged inversion. Bybit and Block Scholes asserted that this change signals the resolution of event risk as the crypto market’s favored candidate was elected with no sign of a contested outcome.
<h2 id="perpetual-swap-open-interest-surges">Perpetual Swap Open Interest Surges</h2>
In addition, the derivatives market is seeing high trading volumes, indicating sustained market activity. There is also a renewed interest in directional bets, showing that perpetual swap open interest mirrors the trend in futures contracts.
The sharp <a href="https://cryptopotato.com/bitcoin-open-interest-hits-record-high-what-does-it-mean-for-btc-price/" data-wpel-link="internal" rel="noopener noreferrer nofollow">surge</a> in perpetual swap open interest indicates that traders are re-entering positions to take advantage of the positive movement following the election results.
<blockquote>
 “This sustained volume and increase in open interest indicate that market participants are actively positioning themselves in response to the growing clarity surrounding the election outcome,” the report added.
</blockquote>
The post <a href="https://cryptopotato.com/crypto-derivatives-market-sentiment-turns-bullish-following-us-election-conclusion-report/" rel="noopener noreferrer nofollow">Crypto Derivatives Market Sentiment Turns Bullish Following US Election Conclusion: Report</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Crypto Derivatives Market Sentiment Turns Bullish Following US Election Conclusion: Report

Table of Contents

CryptoPotato_News

Other articles published on Nov 9, 2024

FTX Settles $228M Lawsuit with Bybit, Aims for $175M Recovery

Bitcoin Poised to Lead Financial Revolution: Binance Exec Predicts Crypto Surge

Raydium (RAY) Dominates the Crypto Space with Over 200% Monthly Surge: What’s Behind the Rally?

Trump win drives Bitcoin to $76K, PlanB sets $500K target

AI set to drive $164 billion increase in banking revenue by end of 2024

Polygon (POL) Price Targets $0.50 with Channel Breakout

Join our free newsletter for daily crypto updates!