Support in the ether. It looks like we’ve hit a decent level of support for ether (ETH) as we hug the $2,200 level and, coincidentally, the 38 Fibonacci retracement level – one of the indicators traders use to gauge potential price stall or reversal.
ETH finds support at $2,200 level (TradingView/)
Bitcoin and ether trend indicators (Indices)
As we wait for more constructive price trends to re-emerge within the market, it’s a good time to check in on the macro environment. While we’ve recently seen an uptick in interest rates (10-year currently at 4.12%), the longer-term trend lower, for real rates, is still supportive for digital assets, especially the smaller-cap altcoins contained within the 20 Index- a benchmark that tracks top cryptocurrencies. (Indices, Federal Reserve Economic Database FRED)
So how did the crypto options market price in the bitcoin (BTC) spot exchange-traded fund (ETF) launch? From a quick ex-post analysis of option implied vs subsequent realized volatility (see below), expectations in the markets have subsided after the event, and it looks like the bitcoin options market gang correctly priced in the market reaction while team ether options were asleep behind the wheel w.r.t. the rally in ETH post bitcoin spot ETF launch. (Deribit, Indices)
Bitcoin options have been more efficiently priced over the period, too. Perhaps team ether got too fat and happy off of collecting that implied vs. realized premium spread?
Need more color on what’s happening in the markets? Check out these stories:
Bitcoin ETF Flows Show Negative Trend For First Time Since Launch: Outflows at Grayscale’s GBTC have remained high while inflows for the other funds as a group have slowed.
ETH ETFs Are Inevitable — But When?: As the SEC delays applications from Grayscale and BlackRock, here is a look at how soon the Securities and Exchange Commission might approve these investment products.
Many Retail Investors See Bitcoin Price Dropping Below $20K by Year End: Deutsche Bank: More of those surveyed said they expect bitcoin to disappear than those who said they expect it to continue to exist, the bank said.
Edited by Aoyon Ashraf.
Link to the article: [https://www.coindesk.com/markets/2024/01/26/vibe-check-ether-finds-support-coindesk-indices-todd-groth/?utm_medium=referral&utm_source=rss&utm_campaign=headlines](https://www.coindesk.com/markets/2024/01/26/vibe-check-ether-finds-support-coindesk-indices-todd-groth/?utm_medium=referral&utm_source=rss&utm_campaign=headlines)
Source Name: Coindesk
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Created at: 2024-01-27T00:03:15.000000Z
Updated at: 2024-01-27T00:03:15.000000Z
The article discusses the recent support level for ether (ETH) and its correlation with the 38 Fibonacci retracement level. This level is considered an important indicator by traders to determine potential price reversals or stalls. The article highlights that ETH has found support at the $2,200 level, indicating a positive trend for the cryptocurrency.
The macro environment is also analyzed, with a focus on interest rates and their impact on digital assets. While there has been a recent uptick in interest rates, the longer-term trend suggests that real rates are still supportive for digital assets, particularly smaller-cap altcoins. The 20 Index, which tracks top cryptocurrencies, is mentioned as a benchmark for these assets.
The article then shifts its focus to the crypto options market and how it priced in the launch of the bitcoin spot ETF. The analysis suggests that expectations in the market have subsided after the event, and the bitcoin options market correctly priced in the market reaction. However, the article points out that the team behind ether options may have been less accurate in predicting the rally in ETH following the ETF launch.
The efficiency of pricing in the bitcoin options market is also highlighted, with a suggestion that the team behind ether options may have been complacent in collecting the implied vs. realized premium spread.
The article concludes by providing additional stories for readers who want more information on what is happening in the markets. These stories include the negative trend in bitcoin ETF flows, the inevitability of ETH ETFs, and the expectations of retail investors regarding the future price of bitcoin.
Overall, the article provides a comprehensive analysis of the current state of the crypto market, focusing on ether’s support level, the macro environment, and the pricing of bitcoin and ether options.