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 report 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.

Derivatives Market Turns Bullish

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 outcome; however, they have recovered as traders are now willing to embrace risk.

“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.

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.

Perpetual Swap Open Interest Surges

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 surge in perpetual swap open interest indicates that traders are re-entering positions to take advantage of the positive movement following the election results.

“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.

Ethereum has seen a significant uptick in buying pressure near the $2.4K support level, driving an impulsive price surge and reclaiming several key resistance regions. This action is signaling a potential shift towards a bullish market sentiment, with higher price levels expected in the mid-term.

By Shayan

The Daily Chart

The daily chart shows that intensified buying near the channel’s middle boundary of $2.4K has sparked a substantial upward move, allowing Ethereum to break through several critical resistance points:

• The 100-day moving average at $2.5K
• The descending channel’s upper boundary is around $2.8K
• The 200-day moving average at $3K

This strong performance suggests a bullish shift, with Ethereum reclaiming these resistance levels. Additionally, crossing the psychological $3K threshold reinforces a positive market sentiment, raising the possibility of reaching a new all-time high by year-end. However, a brief consolidation corrections phase might be necessary to sustain this trend healthily, allowing for potential profit-taking and market stabilization.

The 4-Hour Chart

The 4-hour chart shows an initial surge from $2.4K, the lower boundary of the descending flag pattern, where buying pressure has been strong. Ethereum has now surpassed the $2.8K resistance, which had acted as a significant barrier in recent months.

This break highlights buyers’ intent to increase the price, with eyes potentially set on a new ATH.

Currently, Ethereum is approaching $3.1K, the flag’s upper boundary, where notable selling pressure may emerge. Given the impulsive nature of the recent increase, a short-term rejection followed by a temporary corrective retracement seems possible. In this case, a brief correction toward the support range of $2.7K —$2.6K (bounded by the 0.5 and 0.618 Fibonacci retracement levels) would be beneficial, setting the stage for a healthier uptrend.

By Shayan

The fund market premium metric is an essential indicator, as it reflects the difference between a fund’s market price and its Net Asset Value (NAV). When the premium is elevated, it suggests strong buying pressure within a specific region, indicating that investors are paying a higher price for fund shares relative to the underlying assets.

This premium metric substantially declined from mid-November 2021, when Ethereum reached its all-time high. This decline aligned with waning interest in Ethereum funds, a typical response as investors became cautious during the subsequent bear market.

However, a pivotal shift occurred as Ethereum reached its bear market low. The premium metric started to rise modestly, marking a return on investor interest. Since January 2023, this premium has steadily increased, signaling a resurgence in confidence for Ethereum-backed assets. Recently, the premium moved above zero, revealing positive market sentiment and suggesting robust demand for Ethereum funds.

In summary, the positive shift in the premium metric is a promising sign of renewed market optimism. If this trend persists, it could reinforce Ethereum’s broader price momentum, potentially contributing to its future price growth trajectory.

Jack Dorsey’s payments and blockchain infrastructure company, Block Inc., is shifting its focus to develop new tools for Bitcoin miners and enhance its self-custody crypto wallet.

According to the latest shareholder letter, the firm plans to reduce its investment in TIDAL, Jay-Z’s former music streaming platform, while also winding down TBD, its Bitcoin-focused unit that aimed to create a decentralized internet known as “Web5.”

Interestingly, the announcement of Block’s focus on Bitcoin mining came in the same week that Donald Trump won the US presidential election, promising a more crypto-friendly environment in the world’s largest economy.

Trump had previously met with Bitcoin mining leaders at Mar-a-Lago in June, bringing together key players from companies such as Marathon Digital and Riot Platforms. During the closed-door meeting, the president-elect expressed support for Bitcoin mining in the US and criticized the Joe Biden administration’s position on cryptocurrency.

Later, Trump reiterated his belief that Bitcoin should be mined in the US, claiming it would help the country achieve energy dominance and urging a shift away from foreign mining operations.

Meanwhile, Dorsey’s shareholder letter noted,

“Within our emerging initiatives, we are refining our investments based on our progress. We are scaling back our investment in TIDAL and winding down TBD. This gives us room to invest in our bitcoin mining initiative, which has strong product market fit and a healthy pipeline of demand, and Bitkey, our self-custody wallet for bitcoin.”

Besides redirecting resources to focus on mining equipment development, Block also plans to allocate resources to Bitkey, which happens to be the firm’s self-custodial Bitcoin wallet which was launched in December 2023.

The cost-cutting efforts, on the other hand, come months after layoffs at the fintech firm.