Market volatility has sparked a surge in options trading on PowerTrade’s altcoin options market, with XRP, SOL, and DOGE seeing significant activity.
Market volatility has led to a surge in options trading for hedging and speculative activities on PowerTrade’s altcoin options market.
An altcoin is an alternative Bitcoin, with its own unique features and functionality.
These digital assets operate on their own blockchain network, allowing for independent transactions and decentralized governance.
With the rise of altcoins, investors have more options beyond Bitcoin, seeking higher returns or specific use cases.
Popular altcoins include Ethereum, Litecoin, and Monero, each serving distinct purposes in the cryptocurrency market.
Key Players and Price Movements
XRP options trading volume has exceeded $5 million this week, with a balanced mix of bullish and bearish positions. This indicates traders’ expectations of significant short-term price movements, potentially driven by regulatory developments or breakout patterns.
Ripple, also known as XRP, is a decentralized cryptocurrency and digital payment network.
Developed by Ripple Labs Inc., it was launched in 2012.
XRP enables fast and low-cost cross-border payments.
Its unique consensus protocol, the Ripple Protocol, allows for real-time settlement of transactions.
The total supply of XRP is capped at 100 billion coins.
Ripple has partnerships with over 200 financial institutions worldwide, including 'American Express' and 'Santander.'
Hedging Activity in SOL and Speculative Frenzy in DOGE
Despite macroeconomic concerns, traders have sought protective plays in Solana (SOL) options, with activity concentrated around strikes ranging from $104 to $121. In contrast, dogecoin (DOGE) has seen a surge in speculative trading, with calls at 14.5, 15.5, 17.5, and 18 cents gaining popularity.
Market Analysis
Bernd Sischka, head of institutional sales at PowerTrade, notes that the activity in the altcoin options market suggests traders are positioning for short-term price movements. The balanced flow between bullish and bearish structures is consistent with the volatile market action, which has seen XRP slide to a five-month low before bouncing back.
A call option gives the purchaser the right but not the obligation to purchase the underlying asset at a predetermined price on or before a specific date. This means that traders who buy calls are implicitly bullish on the market, while those who buy puts are bearish and looking to profit from or hedge against price swoons.
Market Comparison
While the altcoin options market is smaller than the bitcoin and ether options market led by Deribit, where contracts worth millions of dollars are traded every day, it still attracts significant attention. The surge in XRP options trading volume highlights the growing importance of alternative cryptocurrencies in the options market.
The most popular plays in DOGE have been calls at 14.5, 15.5, 17.5, and 18 cents, all expiring on April 13, indicating a speculative frenzy driven by social media or event-driven catalysts.
Dogecoin is a decentralized, peer-to-peer cryptocurrency created in December 2013.
It was founded by Jackson Palmer and Billy Markus as a humorous take on the growing popularity of cryptocurrencies at the time.
Initially, it was designed to be a lighthearted alternative to more serious cryptocurrencies.
However, it gained traction due to its community-driven approach and charitable initiatives.
Dogecoin's value surged in 2021, reaching an all-time high of over $0.74 USD per coin.
