Ethereum options signal a rekindling of market optimism: QCP Capital
Quick Take
- Ethereum options’ implied volatility has soared for near-term dated contracts, according to QCP Capital analysts.
- They observed heavy buying activity of ether top-side calls and noted that ether ETF flows could propel the digital asset above $4,000 toward its peak of $4,800.
Ethereum 
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spot prices have rebounded in early-day trading, with implied volatility increasing significantly for near-term ether options contracts, analysts said.
"Ethereum spot prices have sharply rebounded from a morning low of $3,400, with implied volatility notably rising to 65% in the front end," QCP Capital analysts said.
This observation aligns with The Block's Data Dashboard, which indicates that the current levels of implied volatility for seven-day at-the-money ether options has increased above 62% in the past 24 hours. Ethereum ATM options implied volatility across all ranges has remained elevated since the U.S. Securities and Exchange Commission approved spot ether exchange-traded funds on Thursday, May 23.
The analysts added that this strong bullish sentiment is supported by two developments. The first is that the SEC is closing its investigation into Ethereum 2.0, ruling out any charges alleging that sales of ether are securities transactions. The second is that prospective issuers of spot ether ETFs are reportedly responding to SEC comments and aim to hand them back this week.
Ethereum could surge close to an all-time high
QCP Capital analysts added that the options market has reflected this optimism.
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"The desk is observing heavy buying activity of top-side calls across various tenors, and despite uncertainty around the reception of the spot ether ETF, capturing 10-20% of spot bitcoin ETF flows, could propel ether above $4,000, nearing its peak of $4,800," they added.
Ether's price increased by over 1.5% in the past 24 hours and was changing hands for $3,587 at 4:44 a.m. ET, according to The Block’s Price Page.
The GM 30 Index, representing a selection of the top 30 cryptocurrencies, decreased by 1.17% to 132.75 in the same period.
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