Ether (ETH), the second largest cryptocurrency by market value, witnessed a significant increase in volatility early Monday, when the renewed trade war between the United States and its trading partners triggered broadly based risk aversion in the financial markets.

The price of Ether Tanketet as much as 24%with significant dislocations across centralized exchanges. At the dismissal, the price hit a low level of $ 2,065 compared to $ 2,127 on Kraken and $ 2,150 on Coinbase (Coin), the lowest August 5 crash, according to TradingView and Coindesk data.

According to Cryptoquant, the object glass was the largest since May 19, 2021. The token for Ethereum Blockchain fell in a third straight day and lost 23% in the period, mostly since November 2022. BTC, meanwhile, fell just over 5% to $ 91,200.

Ether’s one-day volatility of the money jumped from an annual 34% to 184% when the price fell, according to Deribit’s options traced by Presto Research.

Deribit’s Ether Dvol index, which measures the expected price bulbulens over the next four weeks, also increased, climbing to 101% from approx. 67%, shows TradingView data.

The jump came when dealers rushed to buy Eth Put Options that provide downward protection, according to Presto Research.

“The move that saw ETH PERP prices on the release of spread from $ 3,285 to $ 2,065 has triggered a significant shift in market position, as shown in the relationship between the putkall from last week’s relatively quiet 0.6 to over 2.5 today – Which indicates a busy downside protection among market participants, ”My Jung, an analyst at Presto Research told Coindesk.

At one point, flashed risk transfers measuring volatility premium (demand) for calls compared to puts, negative values ​​above 10%, an exceptionally strong bias for sets.

Market manufacturers added to volatility

The partly stemmed from market producers who pulled out liquidity, a common feature under unstable trade conditions, according to Griffin Ardern, head of options with options and research on Crypto Financial Platform Blofin.

“Some market manufacturers chose to draw liquidity under high volatility, and their risk -wise behavior affects the possibilities of opportunities,” ARDERN told Coindesk.

According to Markus Thielen, head of 10x research, Delta covering market producers added to the disadvantage of the volatility of ETH.

“When market manufacturers and exchanges encrypted to relieve futures, they sold by any available bid and accelerated sales,” Thielen said in a Monday report to clients.

Market manufacturers are tasked with creating order book liquidity and making money on the Bid-Sask spread. They are price agnostic and strive to maintain a net market (delta) neutral exposure through constantly buying/selling futures. They typically sell to weakness or buy strength, which adds the momentum when they hold a short gamma exposure.

Trade war fears weighing

The pace of Ether Price Sales has led to speculation that a large fund/trader ETH marginet located in derivatives or defi was liquidated, which led to an exaggerated price glass.

To a large extent, however, it seems that slide in ETH and the wider market has been spurred on by the renewed trade war between the United States and Canada, Mexico and China. The concern is that it would inject inflation into the global economy, making it more difficult for central banks, including Fed, to continue to lower interest rates to support economic growth.

Traditional markets also suffered on the back of these concerns. Dow Futures fell more than 650 points early today, with European stock futures subsequently with a Uptick in the dollar.