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 Inte