Bitcoin and Ethereum markets saw reduced implied volatility throughout June, despite geopolitical events that briefly rattled prices.
Traders on Derive.xyz, an on-chain options platform, are now adjusting their strategies for a potentially volatile July, following what analysts describe as a period of “muted response” to high-stakes global risks.
Bitcoin temporarily slipped below $100,000 twice during the height of the military escalations on June 13 and June 22 but quickly rebounded to levels above $107,000 after a ceasefire agreement was reached. Ethereum followed a similar path, fluctuating between $2,600 and a brief drop to $2,200 before stabilizing.
Despite these movements, implied volatility for both assets declined, with Bitcoin’s 30-day implied volatility falling from 44% to 36%, and Ethereum’s from 68% to 60%. Dawson noted that the data indicates traders were betting on a limited fallout scenario, which ultimately came to pass.
Looking forward, Derive’s options market activity suggests that traders are preparing for more pronounced price action in July, particularly for Ethereum.
According to Derive’s probability modeling, there’s only a 10% chance that BTC will reach above $130,000 by the end of August. However, the positioning reflects that market participants are not ruling out a sharp move in either direction.
With inflation and interest rates continuing to influence investor sentiment, these developments are likely contributing to the cautious but watchful positioning seen in crypto options markets.
Dawson wrote
Traders are betting on a big July. With volatility suppressed and positioning split, all eyes are now on the Fed, macro data, and further geopolitical developments. ETH has the stronger momentum narrative, but BTC’s options market is coiled for a decisive move.
Featured image created with DALL-E, Chart from TradingView
