- 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.
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.
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