Cryptocurrency Markets Experience Calm as Option Volatility Declines

Market Calmness Reflected in Options

The 30-day annualized implied volatility indicators for Bitcoin and Ethereum have significantly dropped from their peaks in recent months. On the Bitcoin side, the Deribit DVOL index has fallen to 40%, reaching its lowest point since October. During the November sell-off, the expectation climbed to 59% but has steadily declined, as shown by TradingView data. VolmeX’s BTC volatility index BVIV also confirms a similar trend.

The situation is even more striking for Ethereum. The ETH DVOL index slipped below 60%, marking its lowest point since September 2024. The index peaked at 80.38% in November, and its rapid decline indicates a weakening in hedging demand within the options market. Rather than taking aggressive positions against short-term risks, as seen in October and November, investors are now behaving with expectations of limited fluctuations.

Ethereum’s Risk Perception Approaches Bitcoin

The decline in volatility is not only apparent in absolute terms but also in the relative perception between the two assets. The 30-day implied volatility spread between Ethereum and Bitcoin fell to 16 last week, reaching its lowest level since April 2025. The narrowing, which had risen above 30 in August 2025, suggests that speculative and event-driven positions on Ethereum are resolving more quickly.

The composition of option transactions also clarifies expectations. Last week, strategies involving the sale of volatility, rather than bets on both put and call options, were prominent on Deribit. Markus Thielen, founder of 10x Research, noted that the perception of short-term uncertainty is waning, and the market is undervaluing the likelihood of significant directional movements. Although the strong dollar index and weak spot ETF demand keep downward risks in focus, derivative markets are currently sidelining scenarios of sharp fluctuations based on hedging demand. The continued positive Ethereum-Bitcoin volatility spread indicates an expected higher movement range for ETH.