When assets rise to life highs or multi-month peaks, traders are often faced with the challenge of identifying key resistance levels, price points where the market could take a breather. This is precisely the situation facing bitcoin (BTC) and XRP traders (XRP).
Bitcoin, the leading cryptocurrency by market value, is trading at record highs near $100,000, meaning it is now in uncharted waters. XRP is trading at $2.44, with the 2018 record at around $3.30 as the only chart resistance before entering price discovery mode like BTC.
One way to identify key resistances is to study the distribution of open interest, the dollar value of active option contracts, at different levels of strike prices.
On Deribit, the world’s crypto options exchange, BTC’s $120,000 call strike option is the most popular contract at the moment, with a notional open interest of $1.93 billion, according to the data source Derivative Metrics.
A strike with the highest open interest often marks a resistance level because call sellers, typically institutions, face significant losses if prices rise above that point. As a result, they often act to keep prices above that level. Conversely, the strike level can also act as a magnet due to the hedging activities of market makers or entities tasked with creating order book liquidity.
Remember that before and immediately after the US election, the $100,000 call was the the most preferred in terms of notional open interest. The price is now consolidating around the six-figure mark.
At press time, the $100,000 strike call option is still the second most popular contract, with open interest of $1.8 billion. It is followed by the $110,000 strike call, which boasts an open interest of $1.68 billion.
We can also see that $500 million is locked in the $200,000 strike call, representing a bet that the bitcoin price will double. Most of the open interest is focused on the expiration of June 2025 and September 2025. Analysts at Standard Chartered say they expect the price to reach that level by the end of 2025.
Key levels for XRP
In the case of XRP, the $1 call option is the most popular strike, with more than $3 million in open interest. The option is very much in-the-money, or in profit, as the cryptocurrency is currently trading near $2.42.
The focus now is on the $2.8 call option, where traders have closed in $2 million in open interest. The next potential target is at $5. The so-called deep out-of-the-money call is the third most active open, with an open interest of $1.12 million.
