Bitcoin Implied Volatility Hits Near Two-Year Low, But Funding Rate Indicates Market Remains Bullish

BlockBeats News, July 3rd, according to Deribit's Bitcoin Volatility Index data, the Bitcoin implied volatility has dropped to its lowest level in nearly two years. This index tracks the 30-day forward-looking annualized price volatility expectation, indicating a significant shift in the trading behavior of the largest cryptocurrency.

Over the past two months, Bitcoin has been fluctuating within a narrow range of $93,000 to $111,000, a sharp contrast to its historical price trends. Market analysts attribute the decrease in volatility to multiple factors, with a key factor being Bitcoin holders increasing their bullish option selling activities.

David Lawant, Head of Research at FalconX, pointed out that this strategy of generating income by selling bullish options has effectively dampened price volatility. Currently, around 80% of Bitcoin options open interest is concentrated in the $100,000 to $120,000 strike price range, forming a natural price cushion zone. It is worth noting that despite the low volatility, the Bitcoin perpetual contract funding rate remains positive, indicating that the market sentiment remains bullish.