US-Vietnam Trade Deal Drives BTC 110000 ETH 2500 Surge

Bybit, the world’s second-largest cryptocurrency exchange, has released its latest crypto derivatives analytics report in collaboration with Block Scholes. The report highlights significant movements in the crypto markets last week, particularly the surge driven by a tariff truce between the U.S. and Vietnam on July 2. This event led to a notable increase in short-term volatility expectations, with Bitcoin (BTC) climbing above the $110,000 threshold and Ethereum (ETH) pushing past $2,500.

The derivatives landscape revealed several interesting anomalies. Despite recent ETF launch approvals, SOL perpetual funding rates remained unexpectedly negative. Additionally, ETH options maintained roughly double the implied volatility levels of BTC equivalents throughout both the upward move and any retracements. This indicates a higher level of market optimism and volatility for ETH compared to BTC.

Key insights from the report include the unusual quiet period in BTC options markets, where 7-day implied volatility dropped to just 26% on June 27, the lowest level since mid-2023. This quiet period was quickly reversed by the rally on July 2, which pushed volatility back up to 35% amid broader market optimism following the US-Vietnam trade agreement. ETH significantly outperformed BTC during the July 1-2 period, climbing from $2,400 to over $2,500 before surging another 6% on trade deal news. This price action drove ETH’s 7-day at-the-money implied volatility up by a 10-point daily increase, with ETH options consistently maintaining roughly double the implied volatility of comparable BTC.

The volatility term structure for ETH and BTC remained relatively balanced through most of the week due to limited price movement. However, ETH displayed a more dramatic shift than BTC, with 7-day options now pricing in a 1.3% premium for out-of-the-money calls, completely reversing from the previous day’s -1.9% put skew. This shift indicates a bullish sentiment towards ETH, with investors expecting further upside in the near future.

In summary, the US-Vietnam trade deal had a significant impact on the crypto markets, driving up the prices of BTC and ETH and increasing short-term volatility expectations. The derivatives landscape revealed interesting anomalies, with ETH options maintaining higher implied volatility levels than BTC equivalents and a bullish shift in the volatility term structure for ETH. These insights highlight the importance of monitoring market sentiment and volatility in the crypto markets, as they can have a significant impact on price movements and investor behavior.