ETH price recovered in early trading, with implied volatility increasing significantly for short-term Ether options contracts, according to analysts.
“ETH spot prices have recovered strongly from morning lows of $3,400, with implied volatility increasing significantly to 65% at the top,” QCP Capital analysts said.
This observation is consistent with The Block’s Data Sheet, which shows that the current implied volatility for seven-day Ether options has increased above 62% over the past 24 hours. Implied volatility of ATM Ether options across all ranges has remained high since the U.S. Securities and Exchange Commission (SEC) approved spot ETH Ether funds on Thursday, May 23.
Analysts added that this strong bullish sentiment is supported by two developments. The first is that the SEC is ending its investigation into Ethereum 2.0, eliminating any allegations that the sale of Ether was a securities transaction. Second, the proposed issuers of spot Ether ETFs are responding to the SEC’s comments and plan to return this week.
Ethereum Could Rally Close to Record Highs
QCP Capital analysts added that the options market has reflected this optimism.
“The trading desk is observing strong buying activity in upside call options over various time periods, and while there is uncertainty surrounding the take-up of spot Ether ETFs, the accounting for 10-20% of bitcoin spot ETF inflows, could push Ether past $4,000, near the $4,800 peak,” they added.
Ether price has increased more than 1.5% in the past 24 hours and is trading at $3,579 at the time of writing, according to Bitcoin Magazine’s coin price page.
The GM 30 index, which represents a selection of the top 30 cryptocurrencies, fell 1.17% to 132.75 during the same period.
Thach Sanh
According to The Block
