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Derive Protocol Crosses $100M in Value Locked as Bitcoin Whales Make Waves in Options Trading

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It’s raining options, <a href=»https://www.coindesk.com/daybook-us/2024/12/02/it-s-raining-options-and-btc-doesn-t-care-crypto-daybook-americas» target=»_blank»>CoinDesk said last week</a>, pointing to growing demand for derivatives tied to bitcoin (BTC) and other cryptocurrencies. Now, additional evidence has emerged in the form of record activity on decentralized finance (DeFi), which offers unique and programmable onchain options, perpetuals, and structured products.

The total dollar value of crypto tokens locked (TVL) on Derive has risen past $100 million, alongside a record-setting trading volume and monthly active traders.

“Derive.xyz’s latest market insights reveal remarkable growth and heightened activity, with its total value locked surpassing $100 million for the first time, amid record-setting weeks for trading volume and active traders,» Sean Dawson, head of research at Derive, told CoinDesk in an email.

“Yield on all USDC deposits has reached 10% on Derive.xyz, while it hit all-time highs in notional volume at $369 million and monthly active trades at 5,416,» Dawson added.

The Derive platform <a href=»https://docs.derive.xyz/docs/introduction» target=»_blank»>comprises</a> of Derive Chain, a settlement layer for transactions; Derive Protocol, which enables permissionless, self-custodial margin trading of perpetuals, options and spot; and Derive Exchange, an order book.

The record activity on Derive is consistent with the widespread demand for options tied to cryptocurrencies and digital assets-related investment vehicles like spot ETFs and stocks.

Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a predetermined price later. A call gives the right to buy and represents a bullish bet on the market, while a put indicates a bearish bet.

Whales sell BTC calls

Last week, a whale sold <a href=»https://x.com/itseneff/status/1864090349137998097″ target=»_blank»>collected over</a> $1.6 million in premium by selling BTC calls against a long position in the spot market. The so-called covered call strategy involved short positions in March expiry call options at strikes, ranging from $105,000 to $130,000.

The whale will retain the premium if BTC stays below $105,000 by the end of March. Conversely, the long position in the spot market will compensate for losses stemming from a potential rally beyond $130,000.

Another popular strategy among traders has been posting sUSDe, a reward-bearing token earned by staking Ethena’s USDe stablecoin, as collateral on Derive to borrow USDC at rates notably lower than other lending protocols. The same is used to buy sUSDe again, and the cycle is repeated.

The so-called DeFi carry trades earn a double-digit return owing to the positive spread between sUSDe’s 28% annualized yield and Derive’s ongoing USDC borrowing rate of around 18%.

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Ethereum Surges After Holding $2,477, Fueled by Very Heavy Trading Volume

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Global economic tensions and trade disputes continue to influence cryptocurrency markets, with ETH showing resilience despite broader market uncertainty.

The second-largest cryptocurrency is currently navigating a critical technical zone between $2,500-$2,530, which analysts identify as immediate resistance that must be overcome for continued upward movement.

Institutional interest remains strong, with spot Ethereum ETFs recording consecutive days of positive inflows, signaling growing confidence from larger investors despite the recent volatility.

Technical Analysis Highlights

  • 24-hour ETH price action revealed a substantial 3.5% range ($99.85).
  • Sharp sell-off during midnight hour saw price plummet to $2,477.40, establishing a key support zone.
  • Extraordinary volume (291,395 units, nearly 3x average) confirmed the significance of the support level.
  • Buyers stepped in at the $2,467-$2,480 support band, confirmed by high-volume accumulation during the 08:00-09:00 period.
  • Recent price action shows bullish momentum with ETH reclaiming the $2,515 level.
  • Potential higher low pattern suggests the correction may have found its bottom.
  • $2,520-$2,530 area remains the immediate resistance to overcome for continued upward movement.
  • Significant bullish surge at 13:35 saw price jump from $2,515.85 to $2,521.79, accompanied by exceptional volume (5,839 units).
  • Sharp reversal occurred at 14:00, with price dropping 5.07 points to $2,508.02 on heavy volume (4,043 units).
  • Hourly range of 14.46 points ($2,508.02-$2,522.48) demonstrates market indecision.

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XRP Plunges Below $2.30 Amid Heavy Selling Pressure

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Global economic tensions are weighing heavily on cryptocurrency markets as XRP experiences a significant correction amid heavy selling pressure.

The recent announcement of potential 50% tariffs on European Union imports by the US government has triggered widespread market uncertainty, with XRP falling alongside most major cryptocurrencies despite Bitcoin recently reaching new all-time highs.

Technical analysts point to critical support at the $2.25-$2.26 range, with market watchers warning that a break below this level could trigger deeper corrections toward the $1.55-$1.90 zone.

Meanwhile, institutional interest remains strong with Volatility Shares launching an XRP futures ETF and leveraged ETF inflows surging despite the price dip, suggesting Wall Street continues accumulating positions during market weakness.

Technical Analysis Highlights

  • XRP underwent a notable 3.46% correction over the 24-hour period, with price declining from $2.361 to $2.303, creating an overall range of $0.084 (3.57%).
  • The most significant price action occurred during the midnight hour (00:00), when XRP plummeted to $2.297 on exceptionally high volume (37.1M), establishing a strong volume-based support zone.
  • A secondary sell-off at 08:00 saw price touch the period low of $2.280 with the highest volume spike (39.9M), confirming a double-bottom formation.
  • In the last hour, XRP experienced significant volatility with a recovery attempt following the earlier correction.
  • After reaching a low of $2.297 at 13:11, price formed a base around $2.298 before staging a substantial rally beginning at 13:27, peaking at $2.307 at 13:36-13:39 with exceptionally high volume (627K-480K).
  • This bullish momentum created a clear resistance zone at $2.307, which was tested multiple times.
  • The final 15 minutes saw profit-taking pressure emerge, with price retracing to $2.300, establishing a short-term support level that aligns with the psychological $2.30 threshold.

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Bitcoin Drops Below $107.5K as Trump Tariff Threat Triggers Crypto Sell-Off

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Bitcoin’s recent pullback has established strong volume-based resistance near $108,300, with support forming in the $106,700-$107,000 zone.

The correction accelerated with a notable price surge from $107,373 to $107,671 between 13:06-13:36, followed by a sharp reversal.

Technical analysis suggests Bitcoin is now trading within a compression zone, trapped between two major fair value gaps that will determine the upcoming market direction.

If bulls reclaim the $109K to $110K area, price could push toward resistance beyond $112K, while a break below $107,000 might test liquidity around $106K.

Technical Analysis Breakdown

  • The decline accelerated during the 22:00-23:00 hour on May 24th with exceptionally high volume (16,335 BTC), establishing a strong volume-based resistance near $108,300.
  • Support has formed in the $106,700-$107,000 zone where buyers emerged during the 09:00-10:00 period on May 25th, though recovery attempts have been modest with price consolidating around $107,500.
  • The overall technical structure suggests a short-term bearish trend with potential for further consolidation before directional clarity emerges.
  • Bitcoin experienced significant volatility with a notable price surge from $107,373 to $107,671 between 13:06-13:36, followed by a sharp reversal that saw prices decline to $107,393 by 14:00.
  • The most substantial price movement occurred during the 13:35 minute candle where BTC jumped nearly $150 with exceptionally high volume (148.76 BTC), establishing temporary resistance around $107,630.
  • Support formed near $107,400 where buyers emerged during the final minutes of the period, though the overall technical structure suggests continued consolidation within the broader correction from the $109,239 high.

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