Implied Volatility (IV) is the market’s expectation of price volatility. Based on the price of an option, we can determine the expected volatility of the underlying asset. Technically, IV represents the range of one standard deviation movement in the asset’s price that is expected over the course of a year. Tracking At The Money (ATM) IV over time provides a standardized view of volatility expectations, which often change with realized volatility and market sentiment. This index represents ATM implied volatility for options expiring one week from today.

BTC’s 1-week implied volatility has seen significant fluctuations throughout 2024. This is a key indicator of market sentiment, having remained relatively stable at around 50% in the first months of the year, after two spikes in early January and mid-February.

However, as Bitcoin approached its halving event in April, volatility spiked, peaking above 80% as traders anticipated the possibility of a volatile market. Although it eased slightly after the halving, volatility returned mid-year, fueled by increased market uncertainty, possibly related to regulatory developments and macroeconomic conditions.

BTC: ATM Options Implied Volatility – 1 Week: (Source: Glassnode)

Historically, 2024 shows increased volatility compared to the relatively stable environment of 2023. These continuous increases suggest that traders are increasingly paying attention to short-term market risks, reflecting a more speculative trading environment following the halving event.

BTC: ATM Options Implied Volatility – 1 Week: (Source: Glassnode)

This trend is likely to continue as investors grapple with the evolving regulatory landscape and global economic shifts that impact Bitcoin’s price trends.

The increase in Bitcoin volatility following the halving event reflects not only market concerns but also a clear trend of speculative trading. As global economic and regulatory factors continue to influence the value of Bitcoin, understanding and predicting volatility becomes increasingly important for investors. Being alert to short-term risks will be key to navigating this volatile market, especially in the ever-changing landscape of the crypto industry.

Source: https://tapchibitcoin.io/bitcoin-bien-dong-tang-sau-halving-phan-anh-xu-huong-dau-co.html