Ethereum options are seeing a sharp rise in implied volatility (IV), which suggests the risk of a post-ETF selling wave with a gradual recovery thereafter, according to BRN’s Valentin Fournier. The Block.
SEC approved July 23 as the start date for trading of spot exchange-traded funds based on the second-largest cryptocurrency by market cap.
Against this backdrop, the monthly IV jumped from 56% to 70% in a week, according to Deribit.
The ratio of put options to calls expiring on July 26 has increased to 0.45, indicating that traders are seeking to hedge long positions against falling prices.
The largest open interest is concentrated in contracts with a strike price of $3,700. In other words, traders expect a move to this level in the coming days, writes The Block.
According to Fournier, the launch of the ETF could push Ethereum down to the $2800-3100 range, with a subsequent rise to $4000 as the effect of the inflow into the instruments manifests itself.
The specialist recommended “not to lose hope for the positive dynamics of the asset.” The analyst explained that he prefers Bitcoin, since “the excitement and inflow of funds [в биржевые продукты] are already reflected in the rate of the second largest digital asset by market capitalization.”
Steno Research predicted a net inflow of $15-20 billion into future funds within a year and Ethereum growth to $6,500.
K33 Research estimated product revenues in the first five months after the start of trading at $3.1 billion to $4.8 billion.
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Source: Cryptocurrency
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