As a seasoned researcher with extensive experience in the cryptocurrency market, I find the recent surge in Ethereum’s implied volatility on near-term options contracts quite intriguing. According to data from Kaiko, the increase in IV for Ethereum’s July 19 contract is a clear sign that traders are bracing for potential market events, possibly related to the anticipated debut of spot ETH ETFs.
Based on information from data provider Kaiko, Ethereum‘s implied volatility (IV) in short-term options contracts has noticeably risen during the last week. Notably, Deribit ETH options set to expire on July 19 and 26 experienced the most substantial shifts. The IV for the July 19 contracts climbed from 53% on Saturday to reach 62% on Monday, surpassing the longer-term July 26 contracts.
As a crypto investor following the market trends closely, I’ve noticed an intriguing observation from Kaiko. The recent inversion in the ETH–BTC trading pair might signify anticipation among traders for an upcoming market event. According to media reports, spot Ethereum Exchange Traded Funds (ETFs) could potentially launch as early as next week.
As a researcher observing the financial markets, I’ve noticed an uptick in implied volatility for the July 19 contract. This observation implies that traders are becoming more cautious and are prepared to pay a premium to protect their current positions from potential price swings in the near future.
The rise in implied volatility for short-term contracts could be a sign of traders’ apprehension or doubt.
During the summertime, when trading activity typically decreases, liquidity in the ETH market, as represented by the ETF, has remained consistent. Specifically, the ETF’s 1% market depth has been steady around $230 million since its approval in May. Initially, this figure had dipped below $200 million at the beginning of May but rebounded following the SEC’s approval of spot ETFs for Ethereum.
The introduction of ETFs based on Ethereum’s spot price is expected to enhance the liquidity of Ethereum, much like Bitcoin experienced after the launch of its spot ETFs in January.
Ethereum might outperform Bitcoin after ETF debut
As a market analyst at Kaiko, I believe that the upcoming launch of spot Ethereum exchange-traded funds could contribute to Ethereum’s continued outperformance against Bitcoin.
The ratio of Ethereum’s price to Bitcoin’s, as represented in the ETH–BTC market, rose to approximately 0.05 from 0.045. This shift occurred post the SEC’s initial approval for Ether-based Exchange Traded Funds (ETFs) in the United States.
The cost of Ethereum has dropped approximately 10%, down to $3,380. Yet, according to Kaiko, this information alone is incomplete. Despite the price decrease, Kaiko suggests that Ethereum’s improved ratio is a positive sign, indicating potential success once Ethereum ETFs start being traded.
At the time of writing, ETH was up 1.48% in the last 24 hours to $3,400 and up 11% weekly.
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2024-07-16 18:28