Bitcoin options implied volatility drops to record lows; all three occurrences this year have preceded “significant price swings”

BlockBeats News, on July 20, crypto analyst Murphy pointed out that Bitcoin options implied volatility (IV) is currently extremely low, with 1-week IV at 33% and 1-month IV at 34%, both below the historical range of 40%, indicating the market may experience "significant volatility."

According to Murphy's statistics, there have been two similar situations in the past year. After 15 days with IV below 40% at the beginning of January, BTC dropped from $97,000 to $62,000; after 14 days with IV below 40% at the end of April, BTC dropped from $82,000 to $60,000; and after June 15, BTC fell from $66,000 to $58,000.

Murphy pointed out that low IV is caused by market consensus alignment, the accumulation of volatility arbitrage funds, and the short gamma mechanism of market makers, which together amplify the impact of unexpected events. He advised contract traders to be well prepared.