The day after the FOMC decided to lower interest rates, the Bank of Japan announced it would keep its rate policy unchanged. BTC continued its climb above $63,000 with a 2.33% intraday gain, but couldnât break through the key resistance at $64,000. Meanwhile, ETH stole the show after facing criticism for weak price action. A midday rally pushed ETH past $2,500, closing at $2,561 (+5.05%). Despite no significant progress in ETF flow, ETH showed strong upward momentum. Going forward, itâll be crucial to watch for rising exchange reserves to avoid selling pressure from supply-demand imbalances.
Source: TradingView, BTCUSDT vs. ETHUSDT intraday comparison
Looking at implied volatility, most of the front-end uncertainty dissipated following the policy announcement. However, consecutive price gains continued to fuel high realized volatility at the front end of the curve. Despite the upcoming weekend, traders remain concerned about potential hedging costs. A wave of sellers entering the market after todayâs settlement helped lower BTC premiums, with ATM IV quickly dropping from 50.46%/44.81% (21Sep/22Sep) at settlement. The biggest uncertainty now centers around the U.S. presidential election, and after a brief pullback over the past two days, the long end of the IV curve has rebounded significantly. BTC has returned to last weekâs levels, while ETH experienced an even sharper rise.
Source: Deribit (as of 20SEP 8:00 UTC)
Source: SignalPlus
In terms of volatility skew, the positive impact of the rate cut caused the skew to flatten significantly. ETHâs strong performance today pushed the skew to its highest level in a month, with notable buy-call and sell-put activity heading into late September. This could prompt some profit-taking or covered call selling as the weekend approaches.
Source: SignalPlus
Source: SignalPlus, ETH 27SEP trading distribution
Looking at curvature, both BTC and ETH experienced a dip on 29NOV, contrasting sharply with the peak seen in the following month, leaving a cross-term Vol Premium on Wing.
Source: SignalPlus
