
Bitcoin hit by renewed volatility as trade war risk escalates
BTC sold off sharply after briefly testing $88K, dropping back to the $82K handle in a volatile session. ETH and SOL were hit even harder, as residual demand thinned out.
New U.S. tariffs triggered the move: Trump has announced a blanket 10% tariff on all imports, plus steep “reciprocal” rates on ~60 nations-34% on China (on top of an existing 20%) and 20% on the EU.
This marks a dramatic shift toward protectionism, shaking risk assets across the board.
Despite macro headwinds, BTC saw $195M in inflows last week (likely to reverse), while ETH posted $112M in outflows—highlighting diverging institutional sentiment.
With the Fed-‘s balance sheet runoff nearing its end, easier conditions could come later this year—but for now, the market remains very jittery. The Nasdaq was down over 4% post the tariffs announcement.
Short-term vol spikes
Realized vol in BTC has risen by around 15 points, but ETH jumped by 25 as it maintains a higher beta. Front-end implied vols are bid across the board, driven by weak price action and looming geopolitical risks.
Carry was elevated at around 16 vols, but appeared to be justified as realised vol is closing the gap post event.

With only one break of implied daily moves last week, any post-event calm could offer an opportunity to sell gamma again-if spot stays contained. It is probably worth letting the dust settle to see how other nations respond to the tariff escalation.

Put skew surges as market loses bullish footing
Traders rushed for downside protection last week, pushing short-dated BTC put skew to 11 vols and ETH to 15. Those levels have eased but remain firmly in put premium.
Notably, back-end skew also dropped-eroding the long-held call bias.
A potential regime shift is underway. If the long end flips, staying hedged becomes more critical than ever.

ETH/BTC breaks down further as downside fears grow
The ETH/BTC pair made fresh lows this week, giving up recent gains fast.
Front-end vol spread jumped back to 20 vols, while the long-end spread stayed firm at 11 vols.
Options markets are increasingly pricing ETH downside risk into late 2025, with 1500 spot now a credible target.

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