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Over the past 48 hours, crypto markets have impulsed higher. The action was led by BTC breaking the $100k barrier for the first time since the start of February.
BTC is now in an uptrend, after two weeks of consolidation above the prior critical $91k breakdown level. On April 24, I wrote “the trend looks primed to resume — if it doesn’t break down soon.” Other than a test just below $93k a few days later, we saw a steady grind higher.
The ETH rally hasn’t gone unnoticed, either. ETH saw strong upside momentum, with spot up about 30% since Wednesday amid surging trading volumes — a good sign.
Some argue Ethereum’s recent Pectra upgrade is one reason. “It introduces long-awaited improvements that will boost Ethereum’s efficiency and scalability,” said BOB co-founder Dom Harz.
Meanwhile, a pivotal institutional story unfolded with Coinbase’s acquisition of Deribit, the leading off-chain venue for crypto options. “Global derivatives trading is a key driver of growth for Coinbase,” said Fractal Bitcoin’s Spencer Yang, the ex-product head for Coinbase Wallet. “A cash [and] stock deal is a great bargain for Coinbase shareholders since it helps them expand globally.”
And speaking of derivatives, what do they tell us about the longevity of this price action? This move was driven by heavy call spread activity and optimism around trade developments, according to Wintermute analyst Jake O.
Traders are chasing frontend volatility, creating a positive spot-vol correlation through mid-May. However, implied volatility (IV) softens past June, suggesting the rally isn’t being aggressively pursued further out.
That’s confirmed by Nick Forster, founder of onchain options platform Derive.xyz. He sees trader sentiment as “overwhelmingly bullish, with 59% of all ETH premiums and 67.3% of BTC premiums being used to buy calls.”
The expectation is for further short-term upside. “The chance of ETH settling above $2,500 by the end of the month has surged from 2% to 15%, and the chance of BTC hitting over $115K by month’s end has increased from 3% to 13%,” according to Forster.
The broader crypto market landscape is even more telling: ETH is playing catch-up with a 25% rally in the ETH/BTC ratio. And beyond the majors, there’s also strength. We’re witnessing signs of life in the long tail of crypto assets. TradingView’s OTHERS index is up 16%, while stablecoin dominance is dropping — a sign that sidelined capital is flooding back into risk assets.
The US-UK “trade deal” announced yesterday is credited by some with boosting market risk appetite, though it’s largely symbolic. While still more of a framework than a deal, it will have no meaningful impact on US exports and will keep 10% tariffs on most UK imports, making them more expensive for American consumers. As economist Justin Wolfers noted: The Brits “already charge average tariffs of only 1%,” so this turn of events is “a photo op with little macroeconomic significance.”
Even optics can move markets, of course.
“[W]ith these deals, there is hope for more such concessions, and with more deals and concessions will come more certainty and better market conditions,” said Galxe co-founder Charles Wayn. “The bull market may revive yet, and alt season could still be on the horizon.”
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