Bitcoin and Ethereum saw notable declines in implied volatility in June and ignited traders’ plans for July’s potential action. At the blockchain options site Derive.xyz, traders placed high-confidence wagers expecting either a big bump or a rapid fall this month.
Bitcoin dipped temporarily to near $100,000 during the Middle East warfare on June 13 and June 22 but regained the levels shortly thereafter. The cryptocurrency regained its level of nearly $107,000 as the tensions dissipated through a ceasefire agreement between the warring nations. Ethereum was, however, steadier and moved around $2,600 and dipped only once to $2,200 during the war scare.
Volatility metrics indicate a cooling-down period, with the 30-day Bitcoin implied volatility dropping from 44% to 36 in June. Volatility for Ethereum also declined and shifted from 68% to 60%, indicating less uncertainty in the cryptocurrency sphere. Traders at Derive.xyz were already anticipating a contained conflict, and the market reactions accommodated the expectation accordingly.
Bitcoin and Ethereum react to fed Outlook
In the near future, the Derive research team is expecting further potential movement in Ethereum over Bitcoin in July and beyond. Analysts believe Ethereum has the better storyline due to future developments and potential applications with practical uses in the outside world.
Further, open interest data uncovers that Bitcoin investors place nearly 50% of bets around the $130,000-$135,000 and $85,000-$90,000 levels. Such bets suggest an apparent line of demarcation between bullish expectation and prudent downside protection motivated by macro and geopolitical events.
Latest U.S. macro data also knocked market sentiment further off-kilter, with the June jobs report releasing the unemployment figure as 4.1%, lower than forecasted. This development reduced the chances of the Federal Reserve trimming rates in July, with the CME FedWatch now assessing the likelihood of rates staying unchanged at 95%.
Ethereum call options have a bullish skew, with nearly 80% of the July bets targeting levels above $3,000. About 30% of the calls are targeting $3,500 and higher and indicate bullish optimism driven by innovation like tokenized stocks of the sort from Robinhood and Arbitrum Layer 2 developments. Traders now watch inflation, employment data, and global politics as potential drivers for significant crypto price action in the coming weeks.
