Early this morning, Bloomberg ETF analyst Eric Balchunas unexpectedly raised the odds of approval for the ETH spot ETF from 25% to 75% on Twitter. He mentioned that he heard some rumors, and as the issue becomes increasingly influenced by political factors, the SEC’s stance might make a 180-degree turn. Therefore, everyone is now desperately preparing for this. At the same time, Coindesk published an article stating that three informed sources indicated that the SEC has asked ETF exchanges to expedite updates to their 19 b-4 applications. This suggests that the SEC might approve the application before a critical deadline this week. However, the 19 b-4 is just a preliminary battle for the passage of the ether spot ETF. Issuers also need to get approval for the S-1 application to proceed with ETF product trading.
Source: Twitter
The news quickly spread across the market, and the price of ETH surged by 20%, catching up with the recent gains in BTC that it had fallen behind. It successively broke through several resistance levels and challenged the $3,700 mark. BTC also took advantage of the situation and broke the high since April, returning above $71,000. This surge, triggered by unexpected news, led to a massive liquidation of short positions. According to data from coinglass, the amount of ETH short positions liquidated yesterday alone was as high as $80.7 million USD.
Source: TradingView, ETH surged, catching up with the recent gains of BTC.
Source: Coinglass, Massive liquidation of short positions in the past 24 hours.
In terms of options, the jump in actual volatility of ETH has driven a significant flattening and rise in option IV, compared to BTC’s 2–6% Vol increase at the front end. ETH has almost outpaced BTC by 6 times in the short end, reaching a 30% -40% Vol spread, leading to increased market attention on this week’s ETH Spot ETF decision, pushing the ATM IV of ETH on the 24th to near historical highs of almost 100%. From a trading perspective, the buying and selling of ETH call options are relatively balanced, with concentrations towards the end of May and June. This includes May OTM Calls and purchases in June represented by 4000-C, while also seeing a larger proportion of sales at higher strike prices, possibly consuming the market’s overbought sentiment under high IV conditions earlier.
Source: Deribit （As of 21 MAY 8:00 UTC）
Source: SignalPlus
Data Source: Deribit, Overall distribution of ETH trading
Data Source：Deribit，ETH trading distribution for May 31, 2024 / June 28, 2024.
Data Source: Deribit, Overall distribution of BTC trading
Source: Deribit Block Trade
Source: Deribit Block Trade
