Bitcoin options implied volatility drops to low levels; analysts say it may signal major price swings

Odaily reported that Murphy stated Bitcoin options implied volatility is currently extremely low, with 1-week IV at 33% and 1-month IV at 34%, both below the historical range of 40%, which could indicate significant market volatility. Murphy's statistics show there have been two similar instances over the past year: after IV fell below 40% in early January, BTC dropped from $97,000 to $62,000 within 15 days; after IV fell below 40% at the end of April, BTC dropped from $82,000 to $60,000 within 14 days; after June 15, BTC dropped from $66,000 to $58,000. Murphy pointed out that low IV is related to market consensus, the accumulation of volatility arbitrage funds, and the market maker short gamma mechanism, which could amplify the impact of unexpected events, and reminded contract traders to be prepared.