SignalPlus Volatility Column (20240619): SEC Ends Investigation into Ethereum
Yesterday (18 JUN), the U.S. May retail sales month-on-month rate, referred to by the market as "terrifying data," recorded a lower-than-expected 0.1%, while the previous value was revised down from 0% to -0.2%. In terms of digital currencies, the market's focus over the past day has been on Ethereum.
Yesterday (18 JUN), the U.S. May retail sales month-on-month, referred to by the market as "terrifying data," recorded a lower-than-expected 0.1%, while the previous value was revised down from 0% to -0.2%. Following the data release, U.S. Treasury yields fell slightly, reversing yesterday's gains, and the three major stock indexes closed slightly higher. On the other hand, several Federal Reserve officials expressed conservative views, stating that it would take "a few more months" or "a few quarters" to see data supporting interest rate cuts.
Source: SignalPlus, Economic Calendar
In the cryptocurrency sector, the market's focus over the past day has been on Ethereum. First, it is worth mentioning that the SEC has concluded its investigation into the Ethereum 2.0 blockchain ecosystem. Consensys, involved in Ethereum development, tweeted: "The SEC enforcement division has notified us that it will end its investigation into Ethereum 2.0. This means the SEC will not charge Ethereum sales as securities transactions." The market viewed this as a significant positive, driving the price of Ether to rebound, rising over 3% during the day.
Additionally, Bloomberg ETF analyst James Seyffart stated that the Ethereum spot ETF might launch before July 4, once again attracting traders' bets. Notably, cryptocurrency analyst Lark Davis pointed out that Glassnode data shows ETH exchange balances have reached an eight-year low, with only 10% of ETH circulating on exchanges. He also noted that if the Ethereum spot ETF begins trading in the next two weeks, a large influx of institutional funds will enter the market, leading to a significant supply shock.
Source: TradingView, ETH price compared to BTC price trends
In terms of options, influenced by macro news, the implied volatility curve for ETH options has flattened and risen, reaching around 65%. Large bullish options trades are active, notably including a total of 30,500 contracts bought for the forward 27 SEP 24-4000-C, as well as a single purchase of 7,000 contracts for 28 JUN 24-4000-C. The bullish options for that week were also favored by retail investors due to the price increase, pushing the smile curve overall towards bullish options.
Source: Deribit (as of 19 JUN 16:00 UTC+8)
Source: SignalPlus, ETH IV levels significantly increased
Source: SignalPlus, ETH Vol Skew tilting towards bullish options
Data Source: Deribit, overall distribution of ETH trades
Data Source: Deribit, overall distribution of BTC trades
Source: Deribit Block Trade
Source: Deribit Block Trade
