Bitcoin implied volatility falls to record low, echoing levels seen before past drops

Bitcoin options implied volatility has fallen to a record low, and similar readings over the past year were followed by sharp declines, according to an analysis. Chloe, an analyst at crypto exchange HTX with Chinese roots, said the crypto market this week has entered a typical low-volatility, high-event-risk phase. Bitcoin one-week options implied volatility stands at 33%, while one-month implied volatility is at 34%, both at record lows below 40%, Chloe said. Similar levels were seen three times over the past year, and each was followed by a sharp decline about two weeks later, according to Chloe. Chloe added low implied volatility means options investors are assigning a low probability to future market swings, and it should not necessarily be seen as a leading indicator of a price decline.