Crypto Derivatives Market Shows Signs of Stability Post October's Deleveraging Event: Insights from Bybit Report

Almost a month after a significant liquidation event, a joint crypto derivatives report by the crypto exchange Bybit and research institute Block Scholes suggests a cautious return to stability in the market. The event significantly impacted perpetual swap markets, causing a stagnation in open interest in perpetual contracts below $10 billion. Following the event, traders demonstrated a defensive stance, showing little interest in reclaiming lost positions, and increasing interest in the options sector. Although the market reflects a lack of momentum, and the decoupling of cryptocurrencies from broader risk-on sentiment, options open interest levels are similar to those before the liquidation event. This defensive approach is also reflected in the consistent demand for short-term puts and hedging via options.