Traders Increase Bitcoin Options Activity Amid Declining Implied Volatility

Traders are increasingly using options contracts for Bitcoin and Ethereum as the crypto market consolidates after a rally above $3 trillion. Key points include:

BTC price remains between $94,000 and $95,000.
Implied volatility (IV) for Bitcoin has dropped from 53% to 38% over 7 days and from 50% to 43% over 30 days.
Ethereum’s IV decreased from 74% to 61% over 7 days and from 69% to 63% over 30 days.
This decline in volatility is viewed as a low-cost environment for leverage.

Options Trading Trends

Dr. Sean Dawson from Derive.xyz reported the following:

73% of BTC options premiums are used to buy calls; Ethereum's rate is 81.8%.
Calls outnumber puts by a 3:1 ratio for Bitcoin and 4:1 for Ethereum.
Deribit data shows more balanced positioning across the broader market.
Current sentiment indicates BTC may remain stable through May.

Price Predictions

Dawson's predictions include:

BTC has an 11% chance of exceeding $110K by May 30.
The chance of BTC dropping below $80K has decreased from 11% to 8%.
ETH has a 9% chance of settling above $2,300 by May 30.
The likelihood of ETH falling below $1,600 decreased from 24% to 21%.

On-Chain Data Insights

On-chain indicators show strengthening fundamentals:

Bitcoin's Market Value to Realized Value (MVRV) ratio rose to 2.12, nearing its 365-day moving average of 2.15.
Holders have an average unrealized gain of around 112%.
A "golden cross" in MVRV could indicate resuming bullish momentum.

Continued observation of MVRV trends is essential for assessing market sustainability.