Ethereum’s Fierce Trading Pushes ETH-BTC Volatility Spread to Fresh High
When it comes to spot and derivatives volume, Ethereum has experienced an exponential increase. Its robust metrics have been applauded in the cryptocurrency domain this year. Ethereum has incurred more than 75 percent gains since the beginning of 2020, as it moved from $130 low on Jan. 1 to $228 as at the time of writing.
Contrariwise, Bitcoin has gained about 22 percent since the beginning of this year as it experienced a remarkable decline after trading near $10k and even crossed the critical level briefly, on several occasions. Despite Ethereum’s continuous uptrend, it has declined by more than 19 percent from its 2020 high of $284, while Bitcoin moved down by 15 percent from its 2020 high of $10,366 on Feb. 13.
Ethereum’s performance could be due to an increase in derivatives trading and the spot market. While traders might not hodl Ethereum for a very long time, traders have been hodling Bitcoin as they expect bullish price action, even as the halving is imminent.
That is, relative to Bitcoin, Ethereum’s volatility is currently higher as its price has fluctuated swiftly during this time. Skew charts for ETH-BTC show that there was a huge upsurge in volatility spread within six months. As at the time of writing, it was at 17 percent, an unseen level since June last year.
While reacting to this, the renowned cryptocurrency market analyst Alex Krüger said:
— Alex Krüger (@krugermacro) February 18, 2020
During the upsurge that occurred recently, ETH Futures and Options volume increased, while the total daily volume of ETH spot also increased. Spot volume attained an all-time high of $144 million on Feb. 26, with 81.5 percent from Coinbase and the remaining from LMAX Digital.
The increase in spot and derivatives volume has led to an upsurge in Ethereum’s volatility, in comparison with Bitcoin, suggesting that while investors are hodling Bitcoin, traders are trading Ethereum intensely.
Featured image courtesy of Shutterstock. Source: Cryptopress.