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Bitcoin volatility gauge hits lowest since September as option demand fades
The BVIV fell to 35.6% over the weekend, while put options kept trading at a premium to calls, showing downside protection remains costly.
Bitcoin’s implied-volatility gauge, BVIV, fell to 35.59% over the weekend, the lowest level since September, CoinDesk reported. The move marks a sharp drop from early February, when BVIV rose above 90% during a period of steep declines.
CoinDesk said demand for options positioned for large price swings has dried up, even as market participants keep selling options via overwriting strategies. The result is a supply-demand imbalance in crypto options, according to Griffin Sears, head of derivatives at cryptocurrency prime brokerage FalconX.
With bitcoin holding a range of roughly $62,000 to $66,000 since early July, option traders appear to be less focused on directional bets in the near term. CoinDesk also noted that overwriting has contributed to options supply, alongside weaker demand for big-move exposure.
Even as overall volatility expectations cool, downside insurance remains expensive. CoinDesk reported that put options still trade at a premium to calls, reflecting continued concern about further downside risk for the largest cryptocurrency.
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