The ongoing optimism surrounding ETH is evident in its sustained volatility premium over BTC, despite recent market activity and sell-offs. This reflects a strong market narrative around ETH and its potential prospects. Furthermore, the higher trading volumes in ETH perpetual contracts point to significant long positions being driven by strategic positioning ahead of market developments. During the recent crypto sell-off, there was a notable surge in trade volume for perpetual swaps, leading many traders to close their long positions.
The report indicated that the increased trade volume activity in ETH suggests traders were caught in long positions on a larger scale, possibly due to positioning ahead of an expected ETF start-of-trading date. Moreover, ETH options market volatility remains high, particularly in anticipation of ETF approval, in contrast to BTC options’ more defensive stance. The report highlights that ETH options have a 10–15 point premium in volatility compared to BTC across all tenor points on the term structure. Additionally, ETH has regained its volatility smile skew toward out-of-the-money (OTM) calls much faster than BTC.
Eugene Cheung, Head of Institutions at Bybit, commented on the latest data, emphasizing “The latest data underscores ETH’s resilience and market appeal as we approach key regulatory milestones. Investors are demonstrably positioning themselves favorably amidst growing market expectations.”