Bitcoin Options Implied Volatility Drops to 33% and 34%, Indicating Significant Fluctuations

The implied volatility (IV) of Bitcoin options is currently very low, with a 1-week IV of 33% and a 1-month IV of 34%, both below the historical range of 40%, suggesting that significant market fluctuations may occur. Analyst Murphy has noted that there have been two similar instances in the past year: 15 days after the 1st of January when the IV fell below 40%, BTC dropped from $97,000 to $62,000; and 14 days after the end of April when it fell below 40%, BTC fell from $82,000 to $60,000. After June 15, BTC also declined from $66,000 to $58,000. Murphy pointed out that the low IV is due to a consensus in the market, the accumulation of volatility arbitrage funds, and the short gamma mechanism of market makers. These factors together amplify the impact of unexpected events, reminding contract traders to be prepared.

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