#CryptoNewsCommunity Bitcoin is falling, bond yields are rising. Yet BTC’s implied volatility, an uncertainty gauge, remains low.
BTC's implied volatility remains low despite the recent price selloff. Options specialist prefers a long straddle strategy in this scenario.
What to know:
The 30-day Bitcoin Volatility Index (BVIV) is hovering around 42%, which appears unusually cheap given the mounting macroeconomic uncertainty and recent ETF outflows.
Options specialist says the low implied volatility makes long volatility strategies such as straddles an appealing trade.
Normally, this kind of situation has traders scrambling to buy options, derivative contracts that provide protection from price volatility, resulting in an uptick in the implied or expected volatility. But that’s not the case so far.
Bitcoin’s annualized 30-day implied volatility index, BVIV, has held steady at around 42%, just above a year-to-date low of 40%, according to TradingView data. That looks cheap when viewed against the backdrop of falling prices and rising yields. In other words, the market may be underpricing the actual uncertainty and risk brewing beneath the surface. Volatility traders, therefore, could step in, betting that this current calm is simply the quiet before a bigger storm.
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