First Mover Americas: Ether Options Shed Bearish Skew for First Time in 2 Months, ETH/BTC Ratio Eyes Big Move

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First Mover Americas: Ether Options Shed Bearish Skew for First Time in 2 Months, ETH/BTC Ratio Eyes Big Move

Good morning, and welcome to First Mover, our daily newsletter putting the latest moves in crypto markets in context. Sign up here to get it in your inbox each weekday morning.

Here’s what’s happening this morning:

  • Market Moves: Bitcoin, ether drop as investors reassess bearish implications of lingering macro uncertainty.
  • Featured stories: Investors in the cryptocurrency options markets are showing less demand for protection against prolonged price declines in ether (ETH), the native cryptocurrency of the Ethereum blockchain. Trading indicators suggest that there might a big move coming in the ratio between ether’s price and bitcoin’s, known as ETH/BTC.

And check out the CoinDesk TV show “First Mover,” hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time.

  • Tim McCourt, senior managing director, CME Group
  • Daniel Lacalle, chief economist, Tressis
  • Damanick Dantes, markets reporter, CoinDesk

Market Moves

By Omkar Godbole

Bitcoin slipped to $42,000, pausing the post-Fed recovery rally as the U.S. stock futures pointed to a weak open. Ether fell under $3,000, with chart traders waiting for a bullish UTC close above critical resistance on technical charts.

Market participants continued to assess the implications of the recent hawkish moves by the Federal Reserve ahead of U.S. President Joe Biden’s Europe trip to discuss additional sanctions on Russia.

«My take here is that fundamentals are very supportive, but fear of border risk appetite contagion is holding back the price action,» Ilan Solot, a partner at the Tagus Capital Multi-Strategy Fund, said in an email.

«The recent bounce in global equities – concurrent with spiking inflation, hawkish Fed, and war – has left many investors unconvinced the recovery is sustainable,» Solot added.

The cryptocurrency’s 90-day correlation to the S&P 500, Wall Street’s benchmark index, has hit a 17-month high of 0.495.

In other words, the cryptocurrency’s near-term prospects appear tied to U.S. stocks and a continued rally in the S&P 500 could see bitcoin gain more ground. On Tuesday, the S&P 500 closed above its 200-day moving average – the first so-called bullish close in a month.

Also read: Bitcoin’s Correlation to S&P 500 Hits 17-Month High

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Ether Options Shed Bearish Skew, ETH/BTC Eyes Big Move

By Omkar Godbole

The demand to protect against a prolonged weakness in ether appears to have waned, according to data provided by the crypto derivatives analytics firm Skew.

The six-month put-call skew, which tells how much lower strike puts expiring in six months are being bid up versus higher strike calls, has declined from 5% to 0% this week, shedding bias for puts or bearish bets offering downside protection for the first time since Jan. 25.

The long-term gauge has flipped from bearish to neutral a week after Ethereum developers successfully tested the long-awaited merge of the programmable blockchain’s proof-of-work and proof-of-stake chains, dubbed Eth 2.0.

The upgrade will allow users to hold coins in a cryptocurrency wallet to support network operations in return for newly minted coins and is likely to impact ether’s price positively, analysts told CoinDesk.

First Mover Americas: Ether Options Shed Bearish Skew for First Time in 2 Months, ETH/BTC Ratio Eyes Big Move

ETH/BTC was trading near 0.07 at press time, according to charting platform TradingView.

«We are seeing some strength in ETH, particularly relative to other assets in the ecosystem. ETH/BTC is now trading at around 0.07 again and will soon me meeting some short-term technical resistance at 0.072,»Dibb added.


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