The collapse of Bitcoin’s volatility (BTC) continues as the cryptocurrency remains stagnant, with a slow price share between $ 110,000 and $ 120,000.
The implicit volatility of 30 days of the cryptocurrency, as represented by the Volmex Bivvisx index, fell to 36.5% annualized Wednesday afternoon, reaching the levels seen for the last time in October 2023, when BTC was quoted below $ 30,000, according to Data Fouring TradingView.
The new implicit volatility of multiple years suggests that options of options are not yet hurried to hedges, despite the fact that US economic data encourages concerns about stagflation. The demand for options, which are contracts used to protect or benefit from price changes, is an important driver of the implicit volatility of an asset.
The same can be said about the actions, where the VIX index has reversed Friday’s peak from 17 to 21. The VIX measures the implicit volatility of 30 days in the S&P 500.
BTC reflects stock market volatility patterns
The implicit volatility of BTC has been in a bearish trend of months, moving in the opposite direction of the price of cryptocurrency, which has increased from $ 70,000 to more than $ 110,000 since November.
The negative correlation marks a deep change in the dynamics of the Bitcoin market. Historically, the volatility of BTC and its spot price moved together, with volatility increasing both in bull and bears markets.
The change in this correlation of the volatility of the points is attributed, in part, to the growing popularity of the structured products that imply the writing (sale) of purchase options outside the money, analysts told Coindesk.
This new dynamic suggests that Bitcoin is increasingly reflecting patterns on Wall Street, where implicit volatility often decreases during constant bull races.
Read: Bitcoin’s low volatility rally from $ 70k to $ 118k: a transition story of the dynamics similar to Wild West A Wall Street
