Bitcoin Implied Volatility Rises from 33 to 37 This Week
Bitcoin's implied volatility (IV) increased from 33 to 37, indicating a shift from multi-year lows and suggesting potential market turbulence ahead.
The Deribit Volatility Index (DVOL) now reflects its highest level in weeks, tracking the 30-day implied volatility of bitcoin options. Key points include:
- Implied volatility forecasts price swings based on option prices.
- Last week, short-term IV dropped to around 26%, one of the lowest since records began.
- This low was noted in August 2023, preceding a significant price increase.
- Over the weekend, bitcoin rose from $116,000 to $122,000, highlighting potential volatility expansion.
- August typically sees low volumes, but rising IV indicates traders may expect larger movements.
- Recent data shows the rally was driven by spot markets, indicating a healthier market structure.
- Open interest has been declining, meaning new leverage influx could intensify price fluctuations if sentiment changes.