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Bitcoin’s 30-day implied volatility falls, but risk concerns remain

CoinDesk notes 30-day implied volatility has dropped to a long-held floor of 36%, while demand for puts and the call bid have weakened.

Reported · Written up by our desk · Market Structure

Bitcoin is trading with lower perceived price swings, but that steadiness is not necessarily a sign of low risk, according to CoinDesk’s Daybook newsletter.

CoinDesk points to data showing bitcoin’s 30-day implied volatility has fallen to a long-held floor of 36%, and argues that low volatility can encourage cheaper trading and larger directional positions, leaving dealers exposed. If the market then moves through areas with concentrated positioning, dealer hedging could accelerate price moves.

CoinDesk also cites market commentary suggesting that demand for downside protection has weakened and that strong bids for upside exposure are lacking. The newsletter attributes the shift in hedging demand to a disappearing call bid, and includes views from industry participants at Tesseract Group and Wincent.

As a potential catalyst, CoinDesk highlights the possibility of a breakdown in Hormuz talks, warning that an adverse development could alter volatility dynamics after the period of sustained decline.

Latest closeBitcoin $64,786.20 ▲0.3%

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