Early this morning, Bloomberg ETF analyst Eric Balchunas unexpectedly raised the probability of approval of the ETH spot ETF from 25% to 75% on Twitter. He said he had heard some rumors that because this incident is increasingly influenced by political factors, the SEC's attitude towards this issue may take a 180-degree turn, so everyone is now desperately preparing for it. At the same time, Coindesk published an article stating that three people familiar with the matter stated that the SEC asked ETF exchanges to speed up the update of 19 b-4 applications, which indicates that the SEC may approve the application before the critical deadline this week, but 19 b-4 is only a prelude to the approval of the Ethereum spot ETF. Issuers also need to obtain approval through the S-1 application before they can trade ETF products.
Source: Twitter
The news quickly spread to the market, and the price of ETH rose by 20%, catching up with the recent rise of BTC, breaking through several resistance levels and challenging the $3,700 mark. BTC also took advantage of the upward trend, breaking through the highest level since April and returning to above $71,000. This round of surge caused by unexpected news triggered a large-scale short position liquidation. According to coinglass data, the volume of ETH short position liquidation yesterday alone was as high as $80.7M.
Source: TradingView, ETH surges to catch up with BTC’s recent gains
Source: Coinglass, massive short position liquidation in the past 24 hours
In terms of options, the jump in ETH's actual volatility has pushed option IV to flatten and rise sharply. Compared with the 2-6% Vol increase of BTC at the front end, ETH has almost 6 times the increase in the short end, leaving BTC 30% -40% Vol behind. The market is more eagerly paying attention to the resolution of the ETH Spot ETF this week, pushing the ATM IV of ETH No. 24 to a historical high of nearly 100%. From the perspective of trading, the number of ETH call options is relatively balanced and concentrated in late May and June, including May OTM Call and June 4000-C represented by the purchase. At the same time, we can also see a larger proportion of selling transactions at more distant strike prices, or the overbought sentiment of the market is consumed in advance under the higher IV market.
Source: Deribit (as of 21 MAY 16: 00 UTC+ 8)
Source: SignalPlus
Data Source: Deribit, overall distribution of ETH transactions
Data Source: Deribit, ETH 31 MAY 24/28 JUN 24 transaction distribution
Data Source: Deribit, overall distribution of BTC transactions
Source: Deribit Block Trade
Source: Deribit Block Trade
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