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Ethereum’s volatility drops in terms of BTC; looming change or an anomaly?

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Bitcoin grabs so much attention across the mainstream digital asset ecosystem that a majority of the changes recorded by other major altcoins in the market often go unheeded and unnoticed.

Ethereum’s latest metrics are an illustration of the same, with the world’s largest altcoin recording a stark difference against Bitcoin over the past 24-hours.

Source: Skew

According to Skew analysis, ETH-BTC’s 1 month realized volatility spread registered a significant decline, falling from 45 percent on 12 April to 33 percent on 13 April.

The attached data chart suggests that Ethereum was attaining a lower volatile state than Bitcoin, with respect to the market. However, surprisingly, the drop came around the same time as when Bitcoin registered its most recent pullback. On 12 April at 16:00 UTC, Bitcoin ascended above the $7000 for the second time in a week, but the buyers quickly exhausted themselves. A drop of 8.39 percent between 22:00 UTC to 1:00 UTC depreciated Bitcoin’s value from $7150 to $6550.

Over the same time period, Ethereum registered a correction of 9.60 percent as well, with its valuation dropping from $164.62 to $148.82. Hence, it is a bit strange that Ethereum’s volatility fell in terms of BTC, even though the pullback was stronger on ETH’s side.

From a long-term perspective, it made a bit of sense. Since the start of April, the collective crypto-market has embarked on sideways movement, with an absence of major price swings on the charts. Considering the fact that the attached chart evaluated realized volatility over a month, the recent drop in volatility could potentially mean that the world’s largest altcoin is slowly breaking away from Bitcoin’s dominance.

The Implied Volatility chart also suggested that same, with the ETH-BTC 3-month Implied Volatility registering a minor uptick.

Source: Skew

Previously, right after the crypto-market collapsed, the same metric had dropped significantly, as observed on the charts, a development that suggested the increased dependence of Ethereum on Bitcoin.

However, Bitcoin’s 3rd halving is exactly a month away, on 14 May. The community is expecting the price to rally upwards before the event, something that would inevitably raise the volatility levels of the collective market. Hence, the recent drop in Ethereum’s volatility could be short-lived over the next 4 weeks.


Biraajmaan is a full-time journalist at AMBCrypto covering the US market. A graduate in Automobile engineering, he writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.
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