Trade War Triggers Vol Spike In Crypto

Major Liquidation & V-Shaped Reversal

The crypto market just saw an unprecedented wave of liquidations—nearly $10 billion—eclipsing previous records. ETH took a bigger hit than BTC, revealing a shift away from the support it once enjoyed. Ongoing trade tensions and tariffs further amplify market anxiety, yet these bearish moves may be short-lived. If you’re seeking long-term growth, the fundamental outlook remains promising. For now, tread carefully and stay alert to rapid market changes as we remain in a headline-driven environment under Trump’s early innings taking the presidential office.

Realized Vol Explosion

BTC’s realized volatility has ticked up from the mid-40s to the mid-50s, while ETH soared from 50% to 120% in a far less orderly move. Although front-end implied vols spiked over the weekend, they’re already settling down. BTC carry remains slightly positive, whereas ETH swung sharply negative after a swift 20% drop. Both assets tested their implied downside ranges, but ETH’s breakdown was especially severe.

Skew Hints At Short–Lived Correction

Front-end skew term structures shot into deeper contango as put options gained momentum following the latest tariff news. BTC put skew briefly reached a 5-vol premium, and ETH jumped to 10 before reverting closer to 2. Meanwhile, back-end skew held steady, hovering around a 5–6 vol premium for calls. The options market suggests these moves may be short-lived, offering a window to act before the landscape shifts bullishly again.

ETH/BTC Plummets Into New Lows

ETH/BTC spot broke key support near 0.03 amidst overnight liquidations, sending ETH volatility roughly 20 vols higher than BTC in the front end. The market views this as a one-off event, with the gap expected to narrow from late March onward. Skew spread remains flat out to June, then rises slightly—favouring ETH calls by about 1 vol. This setup hints that recent turbulence may be temporary and that selective opportunities could emerge soon.

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