BTC's implied volatility index, DVOL, has recently declined, maintaining a positive correlation with the cryptocurrency's price.A continued rise in MOVE may weigh over bitcoin, one analyst said.price has recently corrected after weeks of unstoppable rally, tracking weakness in U.S. stocks and bonds.
In other words, despite the price drop, there has been little panic buying of put options or derivatives offering downside protection, which is usually the case in traditional markets. Implied volatility is influenced by demand for options. The diverging trend in the BTC DVOL does not necessarily mean bitcoin is seen as a relatively safe asset and is a bull market feature. BTC's implied volatility"Bitcoin, in this bull market is still very much in a positive spot/vol correlation regime. With the potential parabolic moves to the upside, BTC vol picks up as price starts to rally and softens as we sell off," David Brickell, head of international distribution at Toronto-based crypto platform FRNT Financial, said.
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