ETH Retail Demand Overpowers Declining Implied Volatility

By Prashant Jha
Published April 6, 2021 Updated April 6, 2021
Best Buy In

Exchanges

Sportsbook

Wallet

ethereum Weekly Price analysis
ethereum Weekly Price analysis

ETH Retail Demand Overpowers Declining Implied Volatility

By Prashant Jha
Published April 6, 2021 Updated April 6, 2021

Ether (ETH) broke past the month-long consolidation phase to register a new ATH of $2,152 a couple of days ago. The new ATH comes in the wake of declining Bitcoin dominance which is currently at 55.53% and ETH/BTC pair bottoming at 0.03. However, the new ATH came amid declining implied volatility this year which might indicate that the retail demand is overpowering the lower interest of institutions.

advertisement

Implied volatility is a critical tool to measure market sentiment where it measures the market demand for an underlying asset. The declining implied volatility implies a lower interest of traders in the Options, thus the premium on the option declines, and vice versa.

In case of Ether, declining implied volatility means less demand for Ether Options thus a lower premium on the contracts.

ETH spot is rising while implied vol is down which may suggest retail demand is way higher than institutional at present.

 

Source: Skew

Alt-Season Knocking on the Doors

This bull season has seen Bitcoin more than triple its 2017 ATH while maintaining more than 60% market dominance throughout. However, the dominance has declined sharply this month falling up to 55% thus raising hopes for an alt season quite similar to 2017. ETH has already recorded a new ATH while many other altcoins also recorded their new ATH.

The crypto market cap has crossed the $2 trillion mark for the first time doubling in just three months. ETH soaring retail demand could lead the alt season in 2021 again with its market supply constantly declining as more ETH is being staked in the ETH 2.0 staking protocol with the total amount of ETH staked reaching over 3.5 million.

Not just Ether, but a number of other altcoins are breaking out against BTC including XTZ, Tron, and most recently XRP which recorded a new 3-year high above $0.90.

advertisement
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Prashant Jha
1008 Articles
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

Loading Next Story