Analysis: BTC and ETH Volatility Weakens Ahead of US CPI Release, Derivatives Market Signals Cautious Optimism

Odaily News Before the release of US CPI data, the volatility of BTC and ETH has weakened. Derivatives indicators show a marginal improvement in market sentiment. Although leverage levels have been significantly cleared, funding rates have turned positive, and institutional basis has recovered, traders are still paying a premium for protection against short-term downside risks. Bitcoin is still likely to record its fourth consecutive weekly decline, marking the longest losing streak since mid-November last year. Meanwhile, slowing trading activity and declining volatility are also suppressing overall trading volume. In the derivatives market, the proportion of call option trading volume in the Bitcoin options market has rebounded to 65%. However, the implied volatility term structure remains in a state of short-term inversion, indicating that traders are still paying a high "fear premium" for immediate downside protection. (CoinDesk)