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Investors were expecting an increase in Ethereum price volatility compared to Bitcoin according to a key indicator. According to statistics published by the news source Skew in 2020, within three months, the volatility difference between Ethereum and Bitcoin has increased to 29%;
This Ethereum price volatility is actually the highest volatility since February 23, 2020. This index, which tracks the difference in implied volatility for option contracts in the price of both cryptocurrencies, has increased from -2.4% to +29% in two months. Implied volatility, which is calculated from the price of option contracts and reflects the market’s opinion about the potential movements of the asset, is often considered a proxy for market risk.
The high volatility difference indicates that investors are expecting a higher percent price movement in Ethereum than in Bitcoin.
Traders’ views on Ethereum and Bitcoin volatility
Esquio CEO Emmanuel Goh said:
Investors are focused on DEFI and are thinking of a potential big move in Ethereum price.
The implied swing tells us nothing about the direction of the next big move. As such, traders warn of an increase in the volatility of Ethereum and Bitcoin as a bullish price signal.
Ethereum and Bitcoin volatility difference
Ethereum has seen more price change in the last four weeks.
This quarterly Ethereum-Bitcoin price volatility difference reached 5.7% on July 20
And it last reached 19 percent since June 11, which is the highest level of difference since June 11.
Historical price volatility is a measure of daily price movements that have occurred in the past.
Implied volatility is what the market expects for the future.
According to the CoinDesk report, the price of Bitcoin has increased by 64% compared to this date last year
While Ethereum has increased by more than 200%.
The total value held on the defi platform now stands at $7 billion, according to data provided by defipulse.com.
Most decentralized applications are based on the Ethereum blockchain.
Average Ethereum transaction fees hit a record high of $6 earlier this month, indicating network congestion.