Bitcoin's triple favourable information supports stability, while Ether's volatility surges to take over market dominance.

Author: Imran Lakha

Compiled by: Tim, PANews

Bitcoin Stabilizes: Benefiting from Capital Flow, Policies, and Macroeconomic Tailwinds

Bitcoin is once again approaching its all-time high, supported by a return of investor attention and a favorable macro environment.

In April, the spot Bitcoin ETF attracted nearly $3 billion in net inflows, and has attracted another $1.6 billion from May to date. Data from the U.S. Commodity Futures Trading Commission (CFTC) shows that leveraged funds have not significantly increased their short positions, indicating that most of the capital flows are directional bets rather than arbitrage trades.

At the policy level, relevant trends are increasingly heating up. New Hampshire has become the first state in the United States to pass a law on strategic Bitcoin reserves, with 19 other states also brewing similar bills. Meanwhile, Arizona is simultaneously advancing the legislative process in the fields of cryptocurrency custody and strategic reserves.

At the federal level, the Senate blocked the "GENIUS Act," a stablecoin regulation bill, but the crypto market remains unfazed, and market risk appetite remains solid.

The macro economy has also sent supportive signals. Trump's revision of tariff policies is seen as a measure to promote growth, boosting the stock market and the dollar while lowering the prices of gold and yen, and reducing the likelihood of a recession. Market volatility has cooled, with the VIX index currently falling back to its average level over the past 12 months.

In short, Bitcoin is benefiting from three major factors: rising institutional demand, favorable policy environment, and a warming macro landscape. In terms of position layout, investors are actively going long.

Bitcoin hands over the dominance of volatility to Ethereum

The actual volatility of Bitcoin has risen by about 8 percentage points and has broken through the $100,000 mark again. Ethereum is even more eye-catching, with its actual volatility soaring to 90%, and its price jumped by 30% in just two days. Bitcoin's short-term implied volatility has slightly decreased, while Ethereum's implied volatility surged by 20 volatility points due to the sharp price fluctuations.

The holding cost of Bitcoin has returned to neutral, while the holding cost of Ethereum has turned into a deep negative value, causing heavy losses for Gamma sellers.

Bitcoin's upward trend has only once broken through the implied high point (around the 100,000 mark), while Ethereum has achieved multiple upward breakthroughs. It seems that Bitcoin has handed over the momentum leadership to Ethereum, and whether this situation can continue remains to be seen.

The Bitcoin volatility term structure is flattening, and the call option premium is reappearing.

With the market rebound, the skew curve flattens, and the premiums for call options rise.

The volatility skew of Bitcoin remains around 2-3 volatility points across the entire term structure, indicating the presence of bullish capital flows betting on price increases, but the implied volatility level is still relatively low.

The volatility skew of Ethereum options has shown a downward trend, presenting a mild bearish inclination overall (except for the short-term contract end). If Ethereum can maintain its recent gains and effectively break through the $2800 level, the market may see a resurgence of sustained buying in call options. At this stage, investors remain cautious.

In the long term, Ethereum still has a gap to bridge compared to Bitcoin.

The front-end volatility spread has sharply widened.

ETH/BTC surged 33% in the past week and is currently testing the key descending trend resistance level at 0.025. With Ethereum performing exceptionally well in realized volatility, its short-term volatility premium has skyrocketed to 35 volatility points.

Meanwhile, the long-term volatility spread remains around 15 volatility points, indicating a limited reaction. This phenomenon supports the view that the current level of long-term VEGA (volatility risk exposure) may be suitable for selling.

Despite the significant fluctuations in Ethereum, the volatility skew of short-term options contracts has further tilted towards the premium of put options. This indicates that the options market has not fully recognized this round of bullish momentum.