No Man’s Land
A Nosedive in Volatility
Equities are not the only asset class undergoing a noticeable decline in volatility. Both Bitcoin and Ethereum are following a similar path. Over the past two months, there has been a significant decrease in the implied volatilities of these blue chip cryptoassets, especially following the fallout from the Silicon Valley Bank (SVB) crisis and the subsequent rally in prices following the Federal Reserve’s intervention.
The sense of stagnation in Ether, with its price hovering around $1,800 for several months, is reflected in its volatility pricing. Currently, Ethereum's one-month implied volatility is at its lowest point in the past year. While Bitcoin's implied volatility hasn't quite reached its one-year low, it is clearly moving in that direction. This has left much of the market feeling like it is stuck in no man's land.
From a historical standpoint, the realized volatilities of both BTC and ETH are also on a downward trajectory. Although neither metric is currently at an all-time low, the current trend suggests that they may reach that point soon.
This move towards lower volatility in these major assets signals a broader shift in market dynamics.
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