ETH Spot ETF Launch Could Trigger Price Downturn

IconCryptoNewsTerminal Staff22 Jul, 2024

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ETH Spot ETF Launch Could Trigger Price Downturn

Ahead of the highly anticipated ETH spot ETF launch, market indicators are signaling potential selling pressure and a possible price correction for Ethereum. Deribit ETH options implied volatility (IV) has surged significantly, reflecting increased uncertainty and expectations of significant price swings. According to BRN Analyst Valentin Fournier, this surge in IV suggests that "ETH could face significant selling pressure right after the spot ETF launch and could correct lower." He further notes that the current price of ETH likely already incorporates much of the hype surrounding the ETF launch. Supporting this view, the ETH options put-call ratio currently sits at 1.45, indicating a higher volume of puts being traded. This implies that there is a greater demand for downside protection, suggesting that investors are anticipating a potential drop in ETH's price. It's important to note that while the ETF launch may introduce new buyers into the market, it could also trigger profit-taking from those who have been holding ETH in anticipation of the event. The surge in implied volatility and the increased demand for downside protection suggest that the market is bracing for a potential price adjustment after the ETF goes live.

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