Bitcoin’s triple positive support for stabilization, Ethereum volatility soars to take over market dominance

Author: Imran Lakha

Compiled: Tim, PANews

Bitcoin stabilizes: Benefiting from capital flows, policies and macro

tailwind support

Bitcoin is approaching its all-time high again, supported by a return to investor attention and a favorable macro environment.

Spot Bitcoin ETFs attracted nearly $3 billion in net inflows in April, and have attracted another $1.6 billion in May so far. CFTC data from the U.S. Commodity Futures Trading Commission showed that leveraged funds did not significantly increase short positions, indicating that most capital flows are directional bets rather than arbitrage trading.

At the policy level, related trends are heating up. New Hampshire became the first state in the United States to pass a strategic Bitcoin reserve law, and 19 other states are also planning similar bills. Meanwhile, Arizona is simultaneously advancing the legislative process in the areas of cryptocurrency custody and strategic reserves.

At the federal level, the Senate blocked the GENIUS Act, a stablecoin regulation bill, but the crypto market disagrees with it and the market's risk appetite remains stable.

The macroeconomics also send supportive signals. Trump's tariff revisions are seen as a growth-promoting move, boosting stocks and the dollar, while lowering prices of gold, yen and reducing recession chances. Market volatility has cooled down, and the VIX index has now fallen back to its average in the past 12 months.

In short, Bitcoin is benefiting from three major factors: rising institutional demand, favorable policy environment, and warming up the macro landscape. Judging from the position layout, investors are actively going long.

Bitcoin transfers dominance of volatility to Ethereum

Bitcoin's real volatility rebounded by about 8 percentage points and broke through the $100,000 mark again. Ethereum is even more eye-catching, with its actual volatility soaring to 90%, and its price jumped by 30% in just two days. Bitcoin’s implicit volatility fell slightly in the short term, while Ethereum’s implicit volatility soared by 20 volatility points due to violent price fluctuations.

Bitcoin's holding costs returned to neutrality, but Ethereum's holding costs turned into deep negative values, and Gamma's sellers suffered a heavy blow.

Bitcoin’s upward trend has only once exceeded the implicit high (at the 100,000 mark), while Ethereum has achieved several upward breakthroughs. It seems that Bitcoin has handed over the dominance of momentum to Ethereum, and whether this situation can continue remains to be verified.

Bitcoin volatility term structure flattening, call option premium appears

again

As the market rebounds, the skew curve flattens and call premiums rebound.

Bitcoin's volatility skew remains around 2-3 volatility points throughout the entire maturity structure, indicating that there is a bullish flow of capital betting on price increases, but the implied volatility level is still at a relatively low level.

The volatility skew in Ethereum options has shifted downward, and the overall trend is mildly bearish (except for the short-term contract side). If Ethereum can hold onto the recent gains and effectively break through the $2,800 mark, the market may see continuous buying of call options again. At this stage, investors remain cautious.

In the long run, there is still a gap between Ethereum and Bitcoin to be compensated.

Front-end volatility spreads sharply

ETH/BTC has soared 33% in the past week and is currently testing the 0.025 key downtrend resistance level. As Ethereum performs extremely well in realized volatility, its short-term volatility premium has soared to 35 volatility points.

At the same time, its far-end volatility spread remains near 15 volatility points, indicating that the response is not large. This phenomenon supports the view that long-term VEGA (Volatility Risk Exposure) may be suitable for selling at the current level.

Despite the substantial fluctuations in Ethereum, the volatility skew in short-term option contracts further tilts towards put options premiums. This shows that the options market has not fully recognized this round of upward trend.