Bitcoin options markets are showing a low volatility expectation, something that has actually preceded sharp price action in the past.
Bitcoin Options ATM IV Has Been Going Down Recently
In its latest weekly report, on-chain analytics firm Glassnode has talked about the latest trend in the Bitcoin Options At-The-Money Implied Volatility.
Implied Volatility (IV) refers to an indicator that measures how volatile BTC is expected to be in the future, based on the pricing of Options contracts. At-The-Money (ATM) IV, the version of the metric of interest here, specifically calculates this expectation for the contracts that have their strike price closest to the asset’s current spot price.
The “strike price” is the predetermined price at which the holder of an options contract can choose to buy (in the case of a call or bullish bet) or sell (put or bearish bet) the underlying asset.
Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin Opti
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