Derive Predictions Update: March 26th 2025
Derive.xyz Predictions Update: ETH Poised for Explosive Movement
March 26, 2025 By Nick Forster
As the cryptocurrency market continues to navigate volatile waters, Derive.xyz's latest trading insights point to shifting probabilities for major assets like Bitcoin (BTC) and Ethereum (ETH).
With BTC showing a 1 in 3 chance of dipping below $80K by the end of May, and ETH facing potential volatility with a 30% chance of dropping below $1,800, the market is bracing for potential price movements in the coming months.
Despite these fluctuations, the outlook remains cautiously optimistic, especially with key developments underway in the Ethereum ecosystem and rising momentum for assets like XRP and Solana.
ETH’s volatility could explode in April
ETH’s implied volatility (IV) is sitting at monthly lows of 59% for 7-day (red) and 30-day (blue) tenors, well below BTC’s 45%.
Historically, such low levels rarely hold, indicating we might be entering a period of heightened volatility for ETH in April. Traders should expect a potential price surge as leverage becomes more appealing and the market becomes more reactive.
Source: Derive.xyz, Amberdata
Forward rate signals bearish sentiment but could lead to reversal
The forward rate for ETH is currently below the 5% treasury bill rate, signaling bearish sentiment. A forward rate is a measure of market expectations for an asset’s future value, and when it's lower than safe-haven assets like treasury bills, it suggests less confidence in the near-term performance of ETH.
However, when forward rates are so low, we often see sharp price increases in the following weeks as leveraged positions become more attractive and demand builds.
With ETH's supply on centralized exchanges at a 9-year low, even moderate price movements could trigger significant price hikes as demand rapidly consumes all available supply.”
Source: Derive.xyz, Amberdata
XRP and Solana gaining momentum
XRP is seeing a bullish push, particularly with the SEC dropping its lawsuit against Ripple Labs. Additionally, the SEC's pending review of 5 XRP ETFs could lead to $8 billion in inflows throughout the year.
Solana also seems to be regaining attention with increased meme coin trading and potential institutional backing, with Fidelity registering a Delaware-based fund that may become a Solana spot ETF.
ETH outflows and BTC inflows indicate shift in market dynamics
Last week ETH experienced $86 million in outflows, while BTC saw $644 million in inflows. While this reflects some bearish sentiment towards ETH in the short term, the ETH Foundation has laid the groundwork for a strong rebound in the second half of 2025 with initiatives like ETHRealize to onboard institutional flows and renewed investments in DeFi.
Outlook for ETH and the market
Despite the current slide in ETH’s price, all signs point to a potential strong rebound later in the year. With institutional adoption accelerating and upcoming upgrades like Pectra on the horizon, ETH could experience a significant resurgence. Meanwhile, Solana and XRP are expected to lead the charge in the short term, with ETH likely to reclaim its position later in 2025.