Reading 3 min Published Updated
Ethereum (ETH), the second largest digital asset in the cryptocurrency sector, is currently gaining the attention of traders as volatility gauges point to an intriguing shift in market momentum.
Contrary to the usual pattern, these indicators suggest that Ethereum may experience relatively smaller price fluctuations compared to Bitcoin in the short term, according to Bloomberg.
This unexpected reversal has introduced a new element of anticipation and curiosity among investors who are now keeping a close eye on the evolving cryptocurrency landscape.
Bitcoin Volatility Index. Source: T3 index.
Closing the Gap Between Ethereum and Bitcoin Volatility
At the heart of this phenomenon is an innovative tool – the T3 ether volatility index. It has become an indispensable barometer for assessing and predicting price volatility in the Ethereum market.
Data compiled by Bloomberg shows that the difference in volatility between Ethereum and Bitcoin, as measured by 180-day real or historical volatility, is currently the lowest since 2020. between the volatility of ether and bitcoin.
Ethereum Volatility Index. Source: T3 index.
Caroline Moron, co-founder of cryptocurrency derivatives platform OrBit Markets, told the publication:
“Lower volatility generally helps institutional investors put more capital into crypto as it becomes cheaper to buy protection and manage risk… shrinking the volatility spread could lead to more Ether risk for long-term investors.”
Consequences of Ethereum Price Fluctuation
Changing the flow of Ethereum’s volatility behavior has serious implications. Notably, the implied volatility indices for Bitcoin and Ethereum, which depend on option pricing, have declined after hitting recent highs in March.
However, the implied volatility of Ether has declined at a faster rate. In addition, a broader measurement of the fluctuations of various assets in world markets also indicates a decline.
The implications of changing Ethereum volatility behavior are multifaceted. The faster decline in Ethereum’s implied volatility suggests that market participants have become less uncertain or less concerned about Ethereum’s future price movements compared to Bitcoin. Various factors can influence this, such as changes in legislation, market maturity, or growing investor confidence in the long-term potential of Ethereum.
ETHUSD is trading at $1812. Chart: TradingView.com
In addition, a wider reduction in fluctuations between assets indicates a potential reduction in risk aversion among investors as they perceive a more stable and predictable market environment. This could impact investment decisions and trading strategies as market participants adjust their risk management and resource allocation approaches based on the changing volatility pattern.
The changing volatility of Ether, as reflected in the Bitcoin and Ether implied volatility indices, as well as the broader measure of fluctuation between assets, highlight the evolving nature of the cryptocurrency market.
– Featured Image by Coinnounce
Reading 3 min Published Updated
Ethereum (ETH), the second largest digital asset in the cryptocurrency sector, is currently gaining the attention of traders as volatility gauges point to an intriguing shift in market momentum.
Contrary to the usual pattern, these indicators suggest that Ethereum may experience relatively smaller price fluctuations compared to Bitcoin in the short term, according to Bloomberg.
This unexpected reversal has introduced a new element of anticipation and curiosity among investors who are now keeping a close eye on the evolving cryptocurrency landscape.
Bitcoin Volatility Index. Source: T3 index.
Closing the Gap Between Ethereum and Bitcoin Volatility
At the heart of this phenomenon is an innovative tool – the T3 ether volatility index. It has become an indispensable barometer for assessing and predicting price volatility in the Ethereum market.
Data compiled by Bloomberg shows that the difference in volatility between Ethereum and Bitcoin, as measured by 180-day real or historical volatility, is currently the lowest since 2020. between the volatility of ether and bitcoin.
Ethereum Volatility Index. Source: T3 index.
Caroline Moron, co-founder of cryptocurrency derivatives platform OrBit Markets, told the publication:
“Lower volatility generally helps institutional investors put more capital into crypto as it becomes cheaper to buy protection and manage risk… shrinking the volatility spread could lead to more Ether risk for long-term investors.”
Consequences of Ethereum Price Fluctuation
Changing the flow of Ethereum’s volatility behavior has serious implications. Notably, the implied volatility indices for Bitcoin and Ethereum, which depend on option pricing, have declined after hitting recent highs in March.
However, the implied volatility of Ether has declined at a faster rate. In addition, a broader measurement of the fluctuations of various assets in world markets also indicates a decline.
The implications of changing Ethereum volatility behavior are multifaceted. The faster decline in Ethereum’s implied volatility suggests that market participants have become less uncertain or less concerned about Ethereum’s future price movements compared to Bitcoin. Various factors can influence this, such as changes in legislation, market maturity, or growing investor confidence in the long-term potential of Ethereum.
ETHUSD is trading at $1812. Chart: TradingView.com
In addition, a wider reduction in fluctuations between assets indicates a potential reduction in risk aversion among investors as they perceive a more stable and predictable market environment. This could impact investment decisions and trading strategies as market participants adjust their risk management and resource allocation approaches based on the changing volatility pattern.
The changing volatility of Ether, as reflected in the Bitcoin and Ether implied volatility indices, as well as the broader measure of fluctuation between assets, highlight the evolving nature of the cryptocurrency market.
– Featured Image by Coinnounce
