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21 September 2021
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Ethereum

Ethereum Traders Accumulate ETH but Implied-Volatility Continues to Decline

In the past week, Ethereum has culminated in a consolidation between $214 and $200, and a sense of stagnation is currently seen in the charts.

The asset struggled to match Bitcoin’s rally early in May, and with bitcoin ‘s momentum slowly fading at the moment, Ethereum could picture a series of low valuations as well.

However, Ethereum traders continue to place significant trust in the valuation of the asset as the hodling trend continues to grow in the network.

According to glassnode statistics, the number of Ethereum addresses holding more than 100 ETH tokens has reached an all-time high of 47, 722.

A similar sentiment has been observed on the part of Grayscale, as has the accumulation facilitated by the institution over the past year, which has spiked 24 times. Grayscale Invest Ethereum Trust’s Fund Under Management has risen from $11.7 million to $276.5 million given Ethereum ‘s continued low valuation over the past 6 months.

While there was no particular explanation for the holding narrative, many suspected that the imminent launch of ETH 2.0 was generating a sense of anticipation among investors. The initial response received by the update to ETH 2.0 was excellent as the validators flocked to the network.

Volatility at a stand-still?

Now, with regard to the above data, the sentiment of the derivative traders hinted at a sense of contradiction. Analysis of skew market charts indicated that Ether’s 3-month implicit volatility has reached its lowest point since its collapse on March 12.

Now, the drop in implicit volatility is a clear indication that options traders expected a market turbulence pause before another price cycle takes place.

The chart above suggested that the implied press-time variance had fallen to 4.5 per cent. The IV was as high as 7.8% in mid-March. On the other hand, the realized volatility of the largest altcoin has maintained steady movement in the charts, without hinting at a lot of volatility.

In addition, spot markets have also not remained idle, with digital asset exchanges in the industry continuing to register a high level of outflow. Such a phenomenon has been popular among Bitcoin exchanges, as the number of Bitcoin exchanges has fallen to a historic low.

The shift in sentiment across the industry currently poses a number of questions about the forthcoming price action, but only time will tell how things will shape over the next few months.

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