Although the usual volatility has been missing from the derivatives market, recent minor fluctuations have still exposed subtle market trends.

From June 12 to June 14, Bitcoin options open interest rose from $20.85 billion on June 12 to $21.91 billion on June 13, before falling to $21.42 billion on June 14.

Bitcoin options open interest chart from June 8 to June 14, 2024 (Source: CoinGlass)

Similarly, Bitcoin futures open interest slightly declined, from $35.25 billion on June 12 to $34.17 billion on June 14.

Bitcoin futures open interest chart from June 6 to June 14, 2024 (Source: CoinGlass)

This pattern in options open interest, alongside the price changes, indicates a complex market sentiment. Bitcoin's price fell from $69,555 on June 11 to $66,780 on June 14, with a brief recovery on June 13. The predominance of call options (67.17%) over put options (32.83%) on June 14 suggests a bullish sentiment despite the price drop. The 24-hour volume for options on June 14 also leaned towards calls (59.88%), reinforcing this bullish outlook even amid declining prices.

These subtle changes in open interest resulted from various factors affecting the broader crypto market. Bitcoin ETFs experienced mixed inflows and outflows over the past few days. A rebound of Bitcoin ETFs with $100 million inflows, contrasted with a sharp $226 million outflow amid Ethereum ETF news, significantly impacted the market. This outflow likely decreased demand for Bitcoin futures, as evidenced by the declining open interest in futures.

SEC Chair Gary Gensler's statement that Ethereum ETFs will be approved this summer likely shifted investor focus and capital towards Ethereum, affecting Bitcoin’s derivatives market. This shift is evident in the Ethereum futures and options market, where open interest increases in the past few days reflect the change in sentiment.

Ethereum options open interest chart from June 8 to June 14, 2024 (Source: CoinGlass)

MicroStrategy’s issuance of convertible notes to purchase more BTC also influenced investor sentiment. Michael Saylor’s recent actions show the company's strong confidence in Bitcoin, impacting investors in the derivatives market by encouraging bullish positions despite a flat price, as seen in the dominance of call options.

ETF outflows directly impact Bitcoin futures and options markets. Outflows from Bitcoin ETFs can lead to reduced liquidity and demand in the futures market, causing a decrease in open interest. This relationship is evident from the data, where a decline in futures open interest follows significant ETF outflows. The connection between ETF flows and futures open interest highlights the importance of institutional participation and sentiment in driving the market.

Bitcoin's stable movement and lack of significant volatility during this period have dampened open interest. When prices remain relatively stable, traders find fewer opportunities for profit, leading to reduced trading activity and lower open interest in futures. The stable price range of Bitcoin from June 10 to June 14, with minor fluctuations, suggests a period of market consolidation, contributing to the observed decline in futures open interest.