Volatility in Ether surges over 100% as its price tumbles.

Ether Volatility Skyrockets Past 100% as Market Chaos Deepens

Ether (ETH) faced extreme price swings on Monday, with its DVOL index surging past 100% as traders rushed to hedge against steep losses. The cryptocurrency tumbled as much as 24% amid broader market panic triggered by escalating U.S. trade war tensions.

The sell-off led to significant price discrepancies across major exchanges. ETH dropped to $2,065 on Deribit, while Kraken and Coinbase recorded lows of $2,127 and $2,150, respectively. According to TradingView and CoinDesk data, this marked ETH’s most volatile session since August 2021. CryptoQuant further reported that this was the largest single-day decline since May 2021.

Over the past three days, ETH has fallen 23%, marking its worst performance since November 2022. In contrast, Bitcoin (BTC) saw a comparatively smaller 5% decline, slipping to $91,200.

Options Traders Flock to Puts

As Ether’s price plunged, demand for protective options soared. Data from Presto Research showed that one-day at-the-money volatility spiked from an annualized 34% to 184%. Deribit’s Ether DVOL index, which measures expected volatility over the next month, also jumped from 67% to 101%.

“The sharp drop in ETH prices triggered a wave of put buying, pushing the put-call ratio from last week’s 0.6 to over 2.5 today,” said Rick Maeda, an analyst at Presto Research. Risk reversals, which gauge the demand imbalance between calls and puts, turned significantly negative, signaling strong bearish sentiment.

Market Makers Exacerbate the Sell-Off

Liquidity shocks played a key role in worsening price swings. According to Griffin Ardern, head of options trading at BloFin, market makers withdrew liquidity as volatility spiked, amplifying price movements.

“Their risk-averse approach created gaps in the order books, leading to exaggerated price declines,” Ardern explained.

Meanwhile, Markus Thielen, head of 10x Research, pointed out that delta hedging activities from market makers fueled further downside pressure. “As market makers scrambled to adjust their positions, aggressive selling accelerated the drop, creating a feedback loop,” he noted.

Trade War Fears Ripple Across Markets

The crypto market’s downturn coincided with rising concerns over U.S. trade policies. President Trump’s announcement of new tariffs on Canada, Mexico, and China sparked fears of economic instability, leading to a global sell-off in risk assets.

Traditional markets also saw sharp declines, with Dow futures sinking more than 650 points and European stocks following suit. The U.S. dollar strengthened as investors flocked to safe-haven assets.

With uncertainty looming over global markets, traders are bracing for continued volatility in Ether and other cryptocurrencies in the days ahead.