Bybit and Block Scholes Release Weekly Crypto Derivatives Market Report Pre-Trump Inauguration

World’s second-largest cryptocurrency exchange by trading volume, Bybit, has released the latest weekly crypto derivatives report in collaboration with Block Scholes. The report provides one last bird’s eye view of movements and signals in the derivatives market in the run-up to Trump’s inauguration.

The overall derivatives market found its pace in the second week of the year in the absence of major news events, with the spot market also treading steadily. However, realized volatility has caught up with implied volatility following the winter break lull, indicating a more energized market. Trading volumes in perpetual contracts have normalized, though participants appear to be awaiting clearer crypto-specific catalysts for more decisive positioning.

Here are some key insights from the report:

Perpetual swap funding rates maintained positive territory throughout the week despite spot price fluctuations. This indicates sustained demand for long positions, with traders expecting prices to rise. Among the top perpetual contracts, BTC, ETH, CRV, and ATOM funding rates varied. While BTC and ETH rates remained largely stable, CRV showed consistently bullish rates throughout the week, contrasting with ATOM which dropped 30% from monthly highs.

After the holiday lull, BTC’s realized volatility has recovered to match implied levels again. While short-term options showed increased hedging activity, especially on the downside, longer-dated contracts maintained a bullish skew with high implied volatility in the 50s range. This is supported by balanced open interest between calls and puts.

Recent CPI data triggered a shift in BTC and ETH volatility smiles, with OTM calls showing higher implied volatility than puts near BTC’s 100K level. This marks a reversal from the previous week’s bearish short-term sentiment, highlighting the market’s sensitivity to macro factors.

The full report, which includes a detailed analysis of volatility trends, funding rates, and options market dynamics, is available for download.

World’s second-largest cryptocurrency exchange by trading volume, Bybit, serves a global community of over 60 million users. Founded in 2018, Bybit is redefining openness in the decentralized world by creating a simpler, open and equal ecosystem for everyone. With a strong focus on Web3, Bybit partners strategically with leading blockchain protocols to provide robust infrastructure and drive on-chain innovation.

Renowned for its secure custody, diverse marketplaces, intuitive user experience, and advanced blockchain tools, Bybit bridges the gap between TradFi and DeFi, empowering builders, creators, and enthusiasts to unlock the full potential of Web3.

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