Implied volatility in Bitcoin and Ethereum options predicts a lackluster market for June, analysts say. However, this could change if spot Ethereum ETF trading begins earlier than expected. Because, in this case, a stagnant market will be caught unprepared for the bull movement in ETH.
What do Bitcoin and Ethereum options show?
Analysts have evaluated current implied volatility levels for Bitcoin and Ethereum options. This metric is a measure of expected future price movement. According to analysts, this metric indicates that traders expect the market to be relatively calm in the coming weeks. “The implied volatility rank is 40. Additionally, the implied volatility percentile is 52. So, both are mid-range indicators that suggest the market is not expecting much activity,” says analyst Luuk Strijers.
Using the Deribit Volatility Index, which measures the market’s expectation of future volatility for Bitcoin over the next 30 days, the Data Dashboard shows that implied volatility for BTC has fallen significantly since mid-May.
Implied volatility of options points to a stagnant market
QCP Capital analysts also point out the same stagnant market indicators. The analysts note that “implied volatility has certainly been crushed following the spot Ethereum ETF approval despite current catalysts.” cryptokoin.comAs you follow from, the US SEC approved spot ether ETFs on Thursday, May 23. However, unlike Bitcoin ETFs, which begin trading the day after approval, the situation is a bit complicated for Ethereum ETFs. Because Ethereum ETFs probably won’t go live for several weeks or months.
However, QCP Capital analysts say “a sleepy market gets caught offside. “Also, our bet is on the bullish side, especially for ETH,” he adds. They suggest that if spot Ethereum ETFs start trading earlier than expected in June, a bullish ETH move will likely occur.
Ethereum put-call rate is in a downward trend
Luuk Strijers adds that there are derivative indicators that show traders are buying put options to hedge against a potential decline in ETH price in the coming weeks. Strijers said, “As of mid-June, the put-call curve is negative. “This points to some bearish expectations for the next two weeks,” he says.
Latest data shows that the put-call ratio for Ethereum options has risen on multiple derivatives exchanges since mid-May. A rising put-call ratio is generally considered a bearish trend. Because it shows that more investors are purchasing put options than call options. Put options are typically purchased by traders when they expect the price of an asset to decline. Because they get the right to sell the asset at a certain price.
The rising Ethereum put-call ratio follows the spot ETH ETF story. This likely indicates that some traders are considering hedging strategies in preparation for potential downside if the launch of these financial products on exchanges is delayed.
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