Ether Plunges 24% Amid Trade War Fears, Marking Biggest Drop Since May 2021

Ethereum's 24% Price Plunge Triggers Market Volatility Amid Global Trade Tensions

  • ethereum’s price experienced a 24% drop, reaching lows of $2,065 on Deribit amid market turbulence.
  • The volatility spike saw ATM options volatility surge from 34% to 184% on Deribit.
  • Put-call ratio jumped from 0.6 to 2.5, indicating strong demand for downside protection.
  • Market makers withdrawing liquidity and delta hedging contributed to price volatility.
  • Trade war concerns between the U.S. and major trading partners triggered broader market instability.

Ethereum‘s native token suffered its most significant price decline since May 2021, plunging 24% amid renewed global trade tensions and market maker disruptions. The cryptocurrency’s dramatic move highlighted growing concerns about market stability and liquidity in digital asset markets.

- Advertisement -

The price disparity across major exchanges was notable, with Deribit recording a low of $2,065, while Kraken and Coinbase showed $2,127 and $2,150 respectively. According to CryptoQuant, this marked the steepest decline since May 19, 2021, with the three-day loss reaching 23% – the most substantial drop since November 2022.

Options market data revealed severe market stress, as Deribit’s at-the-money volatility surged from 34% to 184%. Min Jung, an analyst at Presto Research, noted: “The move has triggered a significant shift in market positioning, as evidenced by the put-call ratio surging from last week’s relatively calm 0.6 to above 2.5 today.”

Market maker behavior amplified the volatility. Griffin Ardern, head of options trading at BloFin, explained that some market makers withdrew liquidity during the high volatility period. Additionally, Markus Thielen from 10x Research highlighted how delta hedging practices contributed to the downward spiral.

The broader context involves escalating trade tensions between the U.S. and its major trading partners – Canada, Mexico, and China. These developments sparked concerns about global inflation and potentially complicated central banks’ ability to maintain accommodative monetary policies. Traditional markets reflected similar anxiety, with Dow futures dropping over 650 points and European markets following suit.

✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.

Previous Articles:

- Advertisement -

Latest

Bitcoin Mining Profitability Jumps 18% in May Amid BTC Price Surge

Bitcoin mining profitability increased by 18.2% in May.The price of Bitcoin (BTC) rose by 20% during the same month.The network hashrate saw a 3.5%...

Attackers Abuse Docker APIs and Tor to Launch Cloud Cryptojacking

Attackers are exploiting misconfigured Docker APIs to mine cryptocurrency in cloud environments.They use the Tor network to hide their activities while deploying crypto miners.Attackers...

Mastercard joins Paxos Global Dollar Network to boost stablecoins

Mastercard has joined the Global Dollar Network, a stablecoin group run by Paxos.The move will allow Mastercard partners to issue, manage, and redeem the...

Crypto Markets Rally as Trump Brokers Iran-Israel Ceasefire

Altcoin prices rose sharply after Donald Trump announced a ceasefire between Iran and Israel. Major cryptocurrencies like Ethereum, Solana, XRP, and Bitcoin recovered recent losses. Experts...

Federal Reserve Drops ‘Reputational Risk’ in Bank Supervision

Federal Reserve will no longer instruct its examiners to use "reputational risk" as a factor when overseeing banks. Supervisors will instead focus on financial risks,...

Must Read

Top 10 BEST Crypto Trading Books for New Traders

If you're thinking of diving into the crypto trading space, acquiring solid knowledge isn't just recommended - it's essential to protect your investment.Learning...