First Mover: Amid New Price Highs, Ether Flips Bitcoin on Options Volume
  Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets May 4, 2021 Sponsored by  (Price data as of May 4 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
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Market Moves by Omkar Godbole  Amid New Price Highs, Ether Flips Bitcoin on Options Volume
Ether (ETH)'s record price rally has triggered a flurry of activity in the options market, driving the cryptocurrency to surpass bitcoin (BTC) in terms of trading volumes for the first time.
The "flippening," along with ether's strong price performance in recent weeks, is a further sign of market focus temporarily shifting away from bitcoin, the top crypto asset by market value.
On Monday, four larger exchanges offering ETH options – Deribit, OKEx, Huobi, and bit.com – registered a combined trading volume high of $1.32 billion, surpassing bitcoin's tally for the first time on record. Bitcoin's options market traded contracts worth $879 million on the same day, according to data source Skew.
Ether's options volume soared as prices for the native token of the Ethereum blockchain rose toward a new lifetime high above $3,400 reached Tuesday. While ether has rallied by over 60% in the past four weeks, bitcoin has dropped by 3%, according to CoinDesk 20 data.
Options are derivatives contracts that give the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. A call option gives the right to purchase, and the put represents the right to sell.
 Ether options volume (Source: Skew) Ether options volume has picked up materially since mid-April, with dominant exchange Deribit contributing over 80% of the total activity.  Ether options open interest (Source: Skew) Ether options open interest, or the number of contracts traded but not settled with offsetting positions, has risen sharply to new record highs above $5 billion, per Skew. Meanwhile, open interest in bitcoin's options market has been trending lower in recent weeks, as seen below.  Bitcoin options open interest (Source: Skew) A similar divergence is seen in the activity in futures tied to the two top cryptocurrencies.
The data represents a shift in investor focus from bitcoin to ether, with Ethereum seeing solid organic growth this year, as recently tweeted by DTC Capital's Spencer Noon.
A report published by digital-asset manager CoinShares on April 26 showed that ether funds and investment products saw an inflow of $34 million in the third week of April, while bitcoin funds lost $21 million.
"New investor money has been flowing into digital assets since the 3rd quarter of last year, but the investor goals are changing," Jeff Dorman, chief investment officer at Arca, noted in a market recap published on Monday. "And in the last few months, the investor interest has narrowed even further to 'can I specifically diversify away from Bitcoin into Ethereum and other digital assets?'"
Analysts foresee a continued bull run in ether, with some betting on a rally to $10,000. Therefore, more traders and investors could join ether's derivatives market in a bid to hedge their spot market exposure, or to take plain bullish or bearish bets.  Ether put-call skew (Source: Skew) At press time, ether's options market is decisively bullish on the cryptocurrency with one, three and six-month put-call skews trading well below zero – a sign of calls (bullish bets) drawing higher than demand than puts.
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Technician's Take by Damanick Dantes Bitcoin Stabilizes After Pullback; Faces Resistance At $58K Bitcoin (BTC) declined about 5% during Asia hours as buyers took profit near the $58,000 resistance level. The cryptocurrency was trading around $56,200 at the time of writing. Price recoveries remain limited around $58,000 and $60,000 as long-term momentum slows.  Hourly bitcoin chart shows support and resistance levels with RSI (Source: TradingView)
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ICYMI In case you missed it, here's the most recent episode of "First Mover" on CoinDesk TV: Digital Dollar in Focus: Accenture and Former CFTC Chair Team Up to Launch Pilots; Ether Record High While crypto markets soar with Ether leading the way, today also brings news of new development in the digital dollar research project. Former CFTC Chairman Chris Giancarlo and Accenture's Senior Managing Director David Treat join "First Mover" to discuss their new partnership to launch digital dollar pilots. Also, CrossTower's Martin Gaspar joins our crypto markets discussion, and Alchemy's Nikil Viswanathan discusses its $80M raise to chase Amazon in the lucrative web services space.
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