Following the approval of several spot ethereum exchange-traded funds (ETFs) in the U.S., ether’s price has been rather subdued, ranging between ,640 to ,740 over the last 12 hours. There’s wasn’t really any substantial upticks other than when the rumors of the approval fueled the previous rise. Market observers are questioning whether or not a […]
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Vitalik Buterin Outlines Improvements for Ethereum’s Decentralized Future
Ethereum co-founder Vitalik Buterin has proposed several enhancements aimed at improving the network’s permissionlessness and decentralization. The proposed changes focus on tackling issues such as miner extractable value (MEV), hardware requirements, and staking dynamics. Ethereum Co-Founder Proposes Enhancements to Boost Ethereum’s Decentralization Vitalik Buterin, Ethereum co-founder, recently shared his vision for the future of Ethereum’s […]
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Ethereum’s Wild Fluctuations: 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 ,000 mark, provided market conditions align favorably.
Featured image from Unsplash, Chart from TradingView
SEC Launched Formal Investigation Into Ethereum’s Security Status Over a Year Ago, New Court Filing Shows
A new court filing claims that the U.S. Securities and Exchange Commission (SEC), led by Chair Gary Gensler, initiated a formal investigation into ethereum’s potential classification as a security more than a year ago. SEC Enforcement Division Director Gurbir Grewal approved a formal investigative order in March last year to scrutinize potential securities transactions involving […]
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Ethereum’s Dive To 3-Year Low Against Bitcoin, Is This A Bear Trap? Trading Guru Weighs In
Trading Guru Peter Brandt has recently commented on the Ethereum vs. Bitcoin chart, offering intriguing insights into market developments.
Brandt’s remark comes after his prior critiques of Ethereum, denigrating it as a “junk coin” and its proponents as “Etheridiots.” However, amidst Ethereum’s recent descent to its lowest position against Bitcoin in nearly three years, Brandt’s stance seems to have transformed.
Ethereum Plunges Against Bitcoin: A Bear Trap?
Upon analyzing the Ethereum-to-BTC chart, Brandt suggested the presence of a “bear trap,” indicating that the ongoing decline in Ethereum’s value compared to Bitcoin might entice sellers into additional short positions.
However, this could lead to an unexpected reversal, turning the apparent breakdown in support into a false signal.
Bear trap? That is always a possibility when price hits a new 35-month low. pic.twitter.com/aKQg9k7TcD
— Peter Brandt (@PeterLBrandt) April 8, 2024
Brandt’s observation of a potential bear trap highlights the complexities within the cryptocurrency market and the importance of considering multiple factors when analyzing price movements.
While Ethereum may be experiencing a period of relative weakness against Bitcoin, Brandt’s cautious optimism suggests that there may be opportunities for a reversal shortly.
Bullish Signals Amid ETH/BTC Downturn
Despite Ethereum’s recent challenges, bullish signals have emerged, hinting at a potential turnaround. The options market, in particular, has shown optimism, with a significant portion of Ethereum options open interest expiring by the end of April being bullish bets on price.
Deribit data reveals that about .3 billion worth of notional ether options are scheduled to expire, with approximately two-thirds of this sum allocated to calls. Moreover, the Ethereum put-call ratio for the April expiration stands at 0.45, signaling a slightly more bullish stance than Bitcoin options.
Notably, a put-call options ratio below one suggests bullish sentiment, with traders favoring call options over put options. Moreover, the emergence of two new Ethereum whales, according to the crypto tracking platform Spot On Chain, identified as 0x666 and 0x435, adds to Ethereum’s bullish sentiment.
These entities collectively withdrew a substantial amount of ETH from a major exchange, suggesting growing confidence in Ethereum’s prospects despite its recent downtrend.
While Ethereum faces downward pressure against Bitcoin, Bitcoin’s resilience in the market is evident. Crypto analyst Ali has highlighted that Bitcoin appears to be breaking out, with a potential upside target of ,000 if it can hold above ,800.
#Bitcoin appears to be breaking out! If $BTC can hold above ,800, the next target becomes ,000! pic.twitter.com/JPLf18KZvt
— Ali (@ali_charts) April 8, 2024
When writing, Bitcoin trades above this critical level with a current market price of ,621, indicating a possible climb towards ,000 shortly.
Featured image from Unsplash, Chart from TradingView
Van Eck Analysts Foresee $1 Trillion Market Cap for Ethereum’s Layer Twos by 2030
Van Eck analysts predict that Ethereum’s Layer two (L2) scaling solutions will reach a trillion market cap within six years, fueled by the need to overcome Ethereum’s limitations in processing capacity, data storage, and computation. Despite acknowledging the potential for significant revenue generation on L2 networks over the base Ethereum network, the analysts express […]
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Polygon CEO: L3s Might Represent a Threat to Ethereum’s Security
Marc Boiron, CEO of Polygon, an Ethereum-compatible sidechain scaling solution, gave his take on the rise of Layer 3 (L3) scaling structures in the Ethereum ecosystem. According to Boiron, L3s only take value away from Ethereum’s chain and concentrate it in their corresponding base L2, creating a security risk for the network. Polygon CEO Criticizes […]
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Consensys to SEC: Recognize the Advanced Safeguards Inherent in Ethereum’s Design
Consensys has told the U.S. Securities and Exchange Commission that Ethereum’s proof of stake implementation “meets and even exceeds the security of Bitcoin’s Proof of Work (PoW).” The blockchain software company said the commission should recognize the advanced safeguards inherent in Ethereum’s design which exceed the “security and resilience safeguards underlying bitcoin-based exchange-traded products.” The […]
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Developing Several Layer-2 Solutions: ‘The Real Solution’ to Ethereum’s Scalability Issue, Says Ken Timsit
The recent surge in Ethereum gas fees can be attributed to the rise in decentralized finance (defi) activity and the growing popularity of layer 2 (L2) chains such as Arbitrum and Optimism, Ken Timsit, managing director of Cronos Labs, has said. Timsit however agreed that the recent Dencun upgrade to the Ethereum network has helped […]
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Ethereum’s Rocky Road To $4,000: Will SEC Hurdles Derail Its Bullish Journey?
Ethereum (ETH) stands at a crucial juncture, with its eyes set on the ,000 price mark. Amid this ambitious pursuit, the digital asset faces a significant challenge that could influence its trajectory: scrutiny from the US Securities and Exchange Commission (SEC).
Despite this potential regulatory hurdle, some analysts remain optimistic about Ethereum’s prospects. A detailed analysis by Captain Faibik, a market watcher, highlighted a bullish pattern in ETH’s four-hour candlestick chart, suggesting that the ,000 threshold is within reach.
Ethereum Eyes ,000 Milestone
This optimism stems from a descending wedge pattern observed by Faibik, indicating an end to Ethereum’s consolidation phase and signaling a possible price breakout. The technical analysis paints a promising picture for Ethereum, suggesting that the asset could reclaim its lost valuation.
$ETH #Ethereum Descending Broadening Wedge Upside Breakout is Confirmed on the 4hrs timeframe Chart..
,000 incoming https://t.co/qrKE5jiXon pic.twitter.com/MLIXefVsd8
— Captain Faibik (@CryptoFaibik) March 25, 2024
However, the recent market conditions have posed challenges for Ethereum, with the asset experiencing a more than 15% drop over two weeks, further exacerbated by the broader Bitcoin market correction.
This decline saw ETH trading below the ,500 mark, with a significant dip to ,070 on March 20, amid reports of the SEC’s increasing interest in classifying Ethereum as a security.
Particularly, reports indicate that the commission has been seeking financial records from US companies engaged with the Ethereum Foundation, intensifying the debate over Ethereum’s classification. Such regulatory scrutiny casts a shadow over Ethereum’s path to ,000, introducing uncertainty into its future.
ETF analyst James Seyffart suggests that the SEC’s stance could lead to the denial of spot Ethereum ETF applications by May 23, 2024. He cites a lack of engagement on Ethereum specifics, contrasting with the approach taken for Bitcoin ETFs.
My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied May 23rd for this round. The SEC hasn’t engaged with issuers on Ethereum specifics. Exact opposite of #Bitcoin ETFs this fall. https://t.co/TyAzAOrAC5
— James Seyffart (@JSeyff) March 19, 2024
Ethereum’s Network Activity: A Silver Lining
Despite these challenges, Ethereum’s network has witnessed notable growth, with increases in daily active users and transaction volumes signaling a bullish outlook for the cryptocurrency. An upsurge in network activity typically indicates heightened demand, a positive sign for Ethereum’s price potential.
From January 3, the number of daily active Ethereum addresses surged by over 46%, coinciding with a significant price rally. This increased activity and price appreciation period highlights Ethereum’s resilience and potential for growth, even in the face of regulatory uncertainties.
As Ethereum navigates through these regulatory and market challenges, the coming weeks will be critical in determining its ability to breach the ,000 mark. The juxtaposition of technical bullish signals against the backdrop of SEC scrutiny presents a complex scenario for ETH.
However, the strength of its network and the increasing user engagement offer a glimmer of hope for Ethereum enthusiasts and investors.
Featured image from Unsplash, Chart from TradingView