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Ethereum’s Implied Volatility goes south- Should ETH holders be worried

The Ethereum protocol is expected to undergo multiple revisions and improvements as part of its growth path. Intriguingly, whenever there is a network update, the Implied Volatility (IV) of ETH rises.

However, Ethereum’s Implied Volatility has decreased in recent days. The long-term implied volatility (IV) for ETH ATM (At-the-Money) options has achieved a historic low of 50%, according to GreeksLive data. As a result, the IV levels for ETH now match those of BTC, implying that the market has factored in future volatility predictions for ETH to be on par with BTC.

For reference, Implied Volatility (IV) is a measure of an asset’s expected volatility calculated from option contract prices. A drop in implied volatility for ETH may suggest a reduction in the market’s anticipation of ETH price changes in the future. This suggests that market players believe the likelihood of major price movements in ETH is lower than it was previously.

Despite the low volatility of Ethereum, the put-to-call ratio for Ethereum has continued to rise across exchanges. A growing put-to-call ratio for Ethereum may indicate that market participants are becoming more negative about the future price of ETH, as they buy more put options to hedge their positions or speculate on a possible price decrease.

You may be wondering what is causing the unprecedentedly high amount of pessimistic emotion surrounding ETH. You might as well thank the Ethereum Foundations for their recent actions.

The Ethereum Foundation, for background, is a non-profit organization that promotes the growth and expansion of the Ethereum blockchain and its ecosystem. At the time of publication, the Ethereum Foundation had sold 15,000 ETH. When the Ethereum Foundation chose to sell its assets on the last two instances, the market value of ETH fell.

In terms of activity, the Ethereum network suffered greatly. The overall number of NFT trades on the network has decreased significantly during the last month. As a result, there was a decrease in gas use. Notably, if Ethereum activity continues to fall, it may have a detrimental impact on the system in the future.

The Ethereum protocol is expected to undergo multiple revisions and improvements as part of its growth path. Intriguingly, whenever there is a network update, the Implied Volatility (IV) of ETH rises. However, Ethereum’s Implied Volatility has decreased in recent days.

The long-term implied volatility (IV) for ETH ATM (At-the-Money) options has achieved a historic low of 50%, according to GreeksLive data.

As a result, the IV levels for ETH now match those of BTC, implying that the market has factored in future volatility predictions for ETH to be on par with BTC. For reference, Implied Volatility (IV) is a measure of an asset’s expected volatility calculated from option contract prices. A drop in implied volatility for ETH may suggest a reduction in the market’s anticipation of ETH price changes in the future.

This suggests that market players believe the likelihood of major price movements in ETH is lower than it was previously. Despite the low volatility of Ethereum, the put-to-call ratio for Ethereum has continued to rise across exchanges.

A growing put-to-call ratio for Ethereum may indicate that market participants are becoming more negative on the future price of ETH, as they buy more put options to hedge their positions or speculate on a possible price decrease. You may be wondering what is causing the unprecedentedly high amount of pessimistic emotion surrounding ETH. You might as well thank the Ethereum Foundations for their recent actions.

The Ethereum Foundation, for background, is a non-profit organization that promotes the growth and expansion of the Ethereum blockchain and its ecosystem. At the time of publication, the Ethereum Foundation had sold 15,000 ETH. When the Ethereum Foundation chose to sell its assets on the last two instances, the market value of ETH fell.

In terms of activity, the Ethereum network suffered greatly. The overall number of NFT trades on the network has decreased significantly during the last month. As a result, there was a decrease in gas use. Notably, if Ethereum activity continues to fall, it may have a detrimental impact on the system in the future.

 

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