Ethereum has reached its highest point since December 2024. Cryptocurrencies, including Bitcoin and Ether, are benefiting from the US-EU trade deal framework. Economic conditions and trade agreements significantly affect cryptocurrencies. The US and EU have agreed on a trade deal framework that includes a 15% tariff rate. As part of this deal, the EU will buy energy from the US. Additionally, the US and China are set to meet soon, with expectations of a 90-day extension for ongoing trade talks. Ethereum’s recent price increase shows positive market sentiment as traders respond to possible trade stability. Ethereum has now hit its highest price since late 2021. This surge is mainly due to the approval of spot Ether ETFs in the US. Improved economic conditions, including the trade deal, create a good environment for riskier assets like cryptocurrencies. The shift from regulatory uncertainty to institutional acceptance means we need to adjust our derivative strategies. In light of this, we should consider strategies that take advantage of lower volatility, as much of the uncertainty surrounding events has lessened. The Ethereum Volatility Index (DVOL) has dropped from over 75% to the mid-50s, suggesting that selling options premiums through tactics like covered calls may be more profitable now. Typically, after major announcements, implied volatility decreases as the market processes the news. The derivatives market is showing strong bullish sentiment, with open interest in Ether options exceeding a record $18 billion. We see a clear preference for call options over put options, indicating strong demand for bullish positions. This suggests that creating bull call spreads could allow us to benefit from further price gains while managing our risk. The positive news from international trade talks helps lower macroeconomic risks that previously caused cryptocurrencies to decline alongside traditional markets. We are monitoring the upcoming meeting between the US and China; a positive outcome would further alleviate global uncertainties. This stability allows new crypto catalysts, such as fund inflows into the new ETFs, to be the main drivers of price movement.

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