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Derive.xyz Market Update: ETH Crashes 14% as Volatility Spikes – BTC Probabilities Shift Bearish
“Amid mounting geopolitical pressure, we’re seeing classic risk-off behavior with falling prices, spiking volatility and a pullback in upside positioning.
“BTC has pulled back over 4% today, from $104,300 to $100,300. We’re also seeing a spike in short-term implied volatility (IV) – up 10% to 45% – as traders begin pricing in fresh risk.
BTC ATM volatility (7 day tenor)
“ETH’s drawdown has been even sharper, down nearly 14% from $2,550 to $2,200. That’s been accompanied by a 15-point jump in 7-day IV to 83%, reflecting increased downside hedging and uncertainty.
“Ethereum’s double-digit loss and volatility spike to 83% show just how fast risk can unravel when leverage is high.
ETH ATM volatility (7 day tenor)
The surge in short-dated IV – BTC to 45%, ETH to 83% – confirms the market is bracing for more instability. Volatility markets are telling us this isn’t over.
BTC price predictions:
“The BTC options market is scaling back on optimism. The probability of BTC ending the year above $200K has dropped to 3.5%, down from 4% last week. Bulls are losing conviction as geopolitical risk and macro headwinds overshadow halving optimism and ETF flows.
“The chance of BTC reaching above $150K by December 31 has also declined, now sitting at 11% compared to 13% previously.
“Meanwhile, the likelihood of BTC closing below $80K remains unchanged at 20%.
“Dropping upside probabilities for BTC and a steady 20% downside chance below $80K show the options market leaning defensive. Traders aren’t betting big on upside right now.
“Without a clear de-escalation trigger, we expect more cautious positioning and subdued momentum in the month ahead.”
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