Dr. Sean Dawson, Head of Research at the “decentralized” on-chain options AI-powered platform, Derive.xyz (TVL $128M, $12.3B trade volume), has shared key insights focused on Bitcoin (BTC) and Ethereum (ETH) markets.
Dr. Sean Dawson, Head of Research at Derive.xyz noted that in the last 24 hours, BTC trading activity has surged, with “open interest hitting $237 million.”
Dawson added that with 38% of BTC contracts being “calls bought and 37.3% puts bought, it’s clear that traders are positioning for increased volatility, particularly with the inauguration just days away.”
He also mentioned that this appetite for market swings “likely reflects growing uncertainty in U.S. markets as expectations for a near-term rate cut diminish.”
He pointed out that bearish sentiment appears to be “gaining traction, with BTC puts now making up 40% of all open interest, a sharp increase from 20% just last week.”
Dawson added that this shift suggests traders are “hedging against potential downside risks as we approach the inauguration.”
He also shared that implied volatility (IV) trends further “highlight this heightened uncertainty.”
BTC’s 7-day ATM IV has risen by “3% to 56.5%, while the 30-day IV is up 1.5%, now at 57.5%.”
This steady climb points to a “more volatile market sentiment leading up to the event.”
He pointed out that ETH, on the other hand, has seen “an even more pronounced spike in IV.”
Over the past 24 hours, ETH’s 7-day IV has “surged by 6% to 74%, nearly double the rise seen in BTC.”
Dawson also stated that ETH’s 30-day IV has climbed “2.5% to 69.5%.”
According to the analysis, this disparity suggests ETH traders “are anticipating greater immediate volatility, possibly due to its higher sensitivity to macroeconomic shifts and speculation surrounding post-inauguration policies.”
Dawson added that as the inauguration draws near, these trends “underline a pivotal moment for traders, with both BTC and ETH markets reflecting a mix of caution and readiness for potential sharp moves.”
As covered, Derive.xyz (TVL $128M, total trade volume $12B), is the leading decentralized protocol that “creates unique and programmable onchain options, perpetuals, and structured products.”
Co-founded by Nick Forster, Jake Fitzgerald, Mike Spain and Dom Romanowski, it empowers users with easily “accessible automated strategies to build, grow, and preserve wealth.”
