Ethereum
Here’s What ETH Implied Volatility Tells Us
The cryptocurrency market has recently exhibited distinct divergences in the behavior of its two leading assets, Bitcoin and Ethereum. While Bitcoin appears to be stepping into a phase of relative stability, Ethereum’s journey paints a contrasting picture of sustained uncertainty, particularly in its options market.
This divergence is highlighted by the sustained high levels of implied volatility associated with Ethereum options, signaling a cautious outlook among investors regarding its future price movements.
Ethereum Persisting Volatility: A Comparative Analysis
Implied volatility (IV) serves as a crucial indicator in the options market, providing insights into the expected price fluctuations of an asset over a specific period. It reflects the market’s temperature, gauging the intensity of potential price movements traders anticipate.
Recent analyses suggest that while Bitcoin’s implied volatility has settled down significantly post-halving, Ethereum’s has not followed suit. As Bitcoin’s IV dipped to a multi-month low, indicating a calming market, Ethereum’s IV remains stubbornly high.
Contrary to the calming waves in the Bitcoin market, Ethereum wrestles with heightened volatility. According to data from Bitfinex Alpha Report, Bitcoin’s volatility index sharply declined from 72% at the time of its latest halving event to about 55%.
On the other hand, Ethereum saw a more modest reduction in its volatility index, dropping from 76% to 65% in the same period. This persistent volatility in Ethereum’s market is primarily fueled by uncertainties surrounding significant upcoming regulatory decisions and broader market implications.
The Ethereum market is particularly jittery in anticipation of the US Securities and Exchange Commission’s (SEC) impending decision on two spot Ethereum ETFs, slated for late May 2024.
This upcoming regulatory milestone is considered a critical event that could either catalyze a major market move or exacerbate the current volatility.
The Bitfinex Alpha report underscores that regulatory uncertainty is a primary driver behind Ethereum’s less significant drop in its Volatility Risk Premium (VRP) compared to Bitcoin’s.
ETH And BTC Show Signs of Recovery Amid Volatility
Ethereum and Bitcoin have shown signs of recovery over the past week in terms of trading performance. Bitcoin has seen a 4.1% increase, while Ethereum reported a more modest gain of 2.4%.
However, the last 24 hours have been less favorable for Ethereum, with a slight dip of 0.7%, underscoring the ongoing volatility and investor caution.
Moreover, Ethereum’s network dynamics also reflect a subdued activity with a marked decrease in ETH burn rate attributed to reduced transaction fees.
This technical aspect further complements a cautious Ethereum market narrative, poised on the brink of potentially significant shifts depending on external regulatory actions.
Despite all these, analysts like Ashcrypto suggest that the current volatility could set the stage for a strong rebound in the year’s third quarter. Drawing on historical patterns, Ethereum’s speculative forecast is potentially reaching the $4,000 mark, provided market conditions align favorably.
Featured image from Unsplash, Chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Ethereum
Justin Sun Potential $66 Million Loss Revealed As Ethereum Price Declines
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Ethereum
Doomsday for Ethereum? ‘A Crash Down To $1,500 Is Coming,’ Says Skeptic, Here’s Why
The crypto market is currently navigating through a turbulent phase, particularly for Ethereum, which has seen a significant downturn of nearly 15% in its value over the past week.
Amid this negative price performance, Peter Schiff, a well-known economist and a skeptic of cryptocurrencies, has chosen to add salt to the wounds by projecting a stark prediction for ETH. According to Schiff, Ethereum could plummet to as low as $1,500, marking a substantial decline from its current levels.
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Shiff’s Bearish Outlook And Community Reaction
Schiff’s prediction comes when Ethereum is trading below the previous crucial support of $3,000 mark, a sharp 30% fall from its peak above $4,500 in March.
This decline coincides with heightened speculation surrounding the potential launch of an Ethereum spot exchange-traded fund (ETF), which seems to have triggered a premature sell-off among investors instead of propelling the price.
Schiff’s commentary suggests that the market’s response to the ETF rumors has been to liquidate positions rather than hold, adding further downward pressure on Ethereum’s price.
He expressed his view on Elon Musk’s social media platform, X, stating, “It looks like those buying the Ethereum ETF rumors couldn’t wait for the fact to sell,” indicating a market driven by speculation rather than sustained investment confidence.
While Schiff’s bearish outlook has garnered attention, it has also sparked a mix of skepticism and agreement within the crypto community. Users have expressed varying opinions on social media platforms, with some questioning the technical basis of Schiff’s $1,500 target.
Others humorously noted that Schiff’s pessimistic predictions often come at market bottoms, suggesting his views might inadvertently signal a buying opportunity. For instance, one user remarked on the irony of Schiff’s timing, indicating that his bearish predictions could contradict market sentiment indicators.
thx for your inputs
you do realize you only become relevant on this side of twitter as a bottom signal lol
youre like those acoustic wif kids who had a stroke on stage the wif party as a top signal
— agent pretzel (@agent_pretzel) July 5, 2024
Ethereum Faces Critical Juncture
Ethereum is experiencing a significant downturn, trading at $2,975—a 4.2% drop over the past day. This decline and Bitcoin’s similar trajectory have led to a 4.1% reduction in the global cryptocurrency market cap, erasing more than $200 billion in value.
According to Coinglass, this downturn has triggered substantial losses for traders, with 207,020 liquidations in the past day, totaling $576.53 million. Ethereum-related liquidations account for $134.58 million, predominantly from long positions.
While Peter Schiff’s outlook may seem too pessimistic amid these market conditions, another voice in the crypto analysis sphere, Inspo Crypto, offers a slightly more moderate view.
He notes that Ethereum’s price has fallen to early May levels and suggests that the next 8-hour trading window could be crucial in determining the market’s direction.
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If Ethereum can rise above these levels, it might potentially ease the bearish trend. However, failure to reach the $3,170 mark (which it already has) could lead to further declines, possibly down to $2,700, exacerbating losses across the altcoin market.
$ETH has broken down below $3,170. The next 8 hours (1D candle) will show whether the bulls have given up or not. If the price retraces back above, we should consider this a deviation. But if $ETH instead retests the lower trend channel next at $3,170 unsuccessfully, it could… pic.twitter.com/1msfKQBf2v
— InspoCrypto (@InspoCrypto) July 4, 2024
Featured image created with DALL-E, Chart from TradingView
Ethereum
Analyst Predicts Ethereum Nosedive, Cautions Investors To Prepare For $2,700 Target
Amid the ongoing bloodbath in the cryptocurrency market, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has not been spared. Over the past week, ETH has experienced a significant 9% price decline, bringing it down to the $3,130 level.
As market participants closely monitor the situation, the focus now lies on crucial levels that must be held back to prevent a deeper retrace that could lead to substantial losses and heightened liquidation rates not witnessed in months.
Make-Or-Break Moment For Ethereum Price
Crypto analyst “Inspo Crypto” has drawn attention that Ethereum’s price has retraced to levels last seen at the beginning of May.
According to the analyst, the upcoming 8-hour trading period, represented by a 1-day candle, will be a critical juncture to determine whether the bulls have capitulated or can muster a comeback.
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A retracement above the abovementioned level could be considered a deviation from the bearish trend. However, if Ethereum fails to retest the lower trend channel at $3,170, it could pave the way for a further decline towards $2,700, consequently impacting altcoins and leading to significant losses across the market.
Upward Trajectory To $5,000 if Price Holds At $3,170
The analyst further asserts that, in his opinion, Ethereum has been operating within a new trend channel since October 2013. Hence, if ETH manages to hold its price within the range of $3,170 without breaking down, it would confirm an upward trajectory towards $5,000. It is important to note that this timeframe extends until the end of the year.
Additionally, it should be considered that Ethereum is still operating within a long-term trend channel.
If the described scenario unfolds, it would also confirm the long-term trend channel, indicating that ETH was trapped in a bearish phase between August 2023 and February 2024 and is now embarking towards $8,000 over the coming months.
However, it is crucial to acknowledge that this analysis does not account for external factors such as monetary policy decisions or geopolitical conflicts.
Nevertheless, if Ethereum manages to hold the $3,170 level and begins an upward ascent, the possibility of an altcoin season becomes increasingly feasible, as suggested by the analyst.
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Ultimately, ETH’s next moves will affect its trajectory and impact the broader crypto landscape, particularly the altcoin market, which has also seen significant losses in recent days.
ETH trades at $3,130 at the time of writing, reflecting a 5% decline in the past 24 hours. As a result, it becomes crucial that the token closes above the aforementioned critical level of $3,170 in the coming hours to prevent potential additional losses, as emphasized by the analyst.
Featured image from DALL-E, chart from TradingView.com
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