Bitcoin’s Implied Volatility Drops to Multi-Year Low of 36.5%
Bitcoin's volatility continues to decline, with prices stabilizing between $110,000 and $120,000. The 30-day implied volatility, measured by Volmex's BVIV index, has dropped to an annualized 36.5%, the lowest since October 2023 when BTC was below $30,000, according to TradingView data.
- Low implied volatility indicates options traders are not seeking hedges despite potential stagflation concerns in U.S. economic data.
- Volatility trends for BTC have diverged from its price movements, which increased from $70,000 to over $110,000 since November.
- This shift suggests a change in market dynamics where BTC's volatility historically aligned with its price changes.
- Growing use of structured products and out-of-the-money call options contributes to this new correlation pattern.
- BTC is increasingly reflecting Wall Street patterns, where implied volatility tends to decrease during sustained bull markets.
