22 hours ago
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Bitcoin Volatility Rises Amid ETF Era’s Diminished Price Swings
Bitcoin's recent price drop of over $40,000 is overshadowed by changes in its volatility markets, suggests Jeff Park, CIO at ProCap BTC and Bitwise advisor. Despite ETF-driven stability, implied volatility (IV) has increased for the first time since 2025, potentially signaling a return to pre-ETF market behavior.
Key Points
- Bitcoin's market structure shift includes ETF outflows, Coinbase discount, structural selling, and liquidation of leveraged longs.
- Implied volatility has risen despite falling spot prices, indicating potential regime shifts in market behavior.
- Historical spikes in IV during crises highlight potential for current volatility trends to impact Bitcoin's market dynamics.
- The current put skew is low, suggesting elevated defensive premiums and possible downside volatility.
- Open interest data reveals more bullish positions, with significant call options outweighing puts, indicating upside exposure.
- Volatility may again drive Bitcoin's market movements, with institutional interest linked to high volatility environments.
- If spot prices continue to decline while IV rises, a sharp upward reversal could occur, whereas stalled volatility might suggest an emerging bear trend.
Bitcoin's price at the time was $85,912, reflecting ongoing market fluctuations.
