The expert pointed to a decrease in faith in the growth of Bitcoin and Ethereum
A significant decrease in the implied volatility (IV) of at-the-money options on Bitcoin and ETH indicates a drop in confidence in the possibility of rising prices. Trader Gordon Grant stated this, writes The Block.
According to the dashboard, the corresponding metric for weekly and monthly contracts associated with the second-largest cryptocurrency collapsed from more than 88% to ~60%. The IV for at-the-money Bitcoin options for the same expiration ranges fell from 77% to less than 51%.
According to Grant, options sellers before and after the halving are losing hope that the price of Bitcoin will rise, at least in the near future.
“The term volatility structure and skew remains comparatively steep, both due to the above dynamics and the potential for dispersion to revive in the second half of the year and into 2025,” the specialist added.
In other words, the market's pricing of options implies a much lower strike price—participants are now equally likely to believe BTC will reach $75,000 by the end of the year and $100,000, compared to a rate above $73,000 in March.
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