update 18 August 2021

ETH and BTC Volatility Contribute to these Cryptocurrencies’ Fresh Uptrend

ETH experienced an exponential increase in recent times, and its robust metrics applauded in the cryptocurrency domain this year. This cryptocurrency gained more than 75% since the beginning of 2020, as it shifted from a $130 low on the 1st of January to $228 on the 3rd of January.

On the other hand, Bitcoin incurred about 22% since the beginning of the year. It experienced a significant drop after trading near $10k and even crossed the critical level briefly on several occasions. Regardless of Ethereum’s upsurge, it declined by over 19% from its 2020 high of $284, as Bitcoin dropped by 15% from its 2020 high of $10 366 on the 13th of February.

Ethereum’s performance may be a result of an increase in derivatives trading and the spot market. While traders might not hodl Ethereum for a very long time, traders continue to hodl Bitcoin, as they expect bullish price action even as the halving is imminent. In this case, relative to Bitcoin, Ethereum’s volatility is currently higher as its price has fluctuated swiftly during this time.

Analyzing the ETH/BTC Skew Charts

The ETH/BTC skew charts reveal a significant uptrend in volatility spread within six months. At the time of writing, it was at 17%, an unseen level since June last year; even a renowned cryptocurrency market analyst, Alex Kruger, reacted to this.

At the time of the upsurge, ETH Futures and Options volume increased, as the total daily volume of ETH spot also inclined. The spot volume attained an all-time high of $144 million on the 26th of February, with 8.15% from Coinbase and the remaining from LMAX Digital.

price change

The increase in spot and derivatives volume led to an upsurge in Ethereum’s volatility, compared to Bitcoin. It suggests that while investors are hodling Bitcoin, traders are intensely trading Ethereum.