Analysis: Bitcoin implied volatility sees the largest increase

According to CoinDesk, Bitcoin's implied volatility has recently seen its largest increase since last November. Deribit's DVOL index jumped from around 37 to above 44, indicating that traders are eager to seek downside protection.

This volatility has risen in tandem with the traditional market volatility index VIX, reflecting a broad risk-off behavior across markets rather than an isolated event in cryptocurrency. Despite the sharp fluctuations, data shows that the current implied volatility has not reached extreme levels. Bitcoin's implied volatility ranking is at 36, meaning the current level is only slightly above the lowest point in the past year; the implied volatility percentile is close to 50, indicating that volatility has been lower than the current value for about half of the past 12 months.

The options market is sending cautious rather than panic signals after over $1.7 billion in long positions were liquidated, revealing the fragility of the market's previous positioning structure. Traders are preparing for more volatility in the future, with some even setting target prices to reach $70,000 within the next few weeks.