Traders Brace for Increased Ethereum Volatility Ahead of U.S. Election

Anticipation for heightened price fluctuations in Ethereum compared to Bitcoin is growing among traders, particularly with key macroeconomic events approaching, according to a crypto analyst.

Nick Forster, the founder of Derive, stated in an October 2 analysis that an increase in Ethereum’s forward volatility is expected from October 25 to November 8, coinciding with the U.S. presidential election.

He believes that the election outcomes could significantly impact Ethereum’s price due to its association with the decentralized finance (DeFi) ecosystem, which may face regulatory challenges depending on the elected candidate.

Data from Derive shows that traders estimate a 68% chance of Ethereum experiencing price swings between -14% and +16% shortly after the election, with a 95% probability of moves between -26% and +35%. Ethereum’s forward volatility is currently at 76.6%, while Bitcoin’s is at 69.8%, indicating that traders expect Ethereum to be more sensitive to external developments.

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Forster further noted that traders appear more confident in Bitcoin’s ability to navigate these macro events, likely due to its status as a reliable digital store of value and lesser exposure to regulatory scrutiny compared to Ethereum. As concerns grow over the potential market impacts stemming from the presidential election, traders are preparing for significant volatility in ETH.

Alexander Stefanov