Bitcoin, Ethereum options implied volatility declines…traders bet on a 'quiet market'

Short-term volatility expectations in the Bitcoin (BTC) and Ethereum (ETH) options markets are falling rapidly, suggesting traders are increasingly leaning toward a stable phase with no major directional move for the time being.

According to crypto-focused media outlet CoinDesk on the 13th, 30-day implied volatility gauges for Bitcoin and Ethereum fell to their lowest levels in months. Bitcoin’s 30-day annualized implied volatility slid to 40%, the lowest since last October, while Ethereum’s implied volatility also dropped below 60%, marking its lowest level since September 2024.

In the options market, strategies betting on volatility compression are becoming more pronounced. In a report, Markus Thielen, founder of 10x Research, said, “From an options-market perspective, this volatility squeeze reflects diminishing short-term uncertainty and expectations that range-bound trading is more likely to persist than a major directional move.” He added, “Traders are unwinding hedge positions or seeking returns through volatility-selling strategies.”

Indeed, recent options activity has shown an increase in trades that simultaneously sell call and put options. Thielen explained, “Last week’s options flow was centered on selling trades betting on lower volatility rather than directional bets.” This contrasts with the sharp-volatility phase seen in October–November last year.

Perceived relative risk in Ethereum is also easing quickly. The 30-day implied volatility gap between Bitcoin and Ethereum has narrowed to around 16, sharply tighter than the peak seen last August (above 30). Thielen said, “Ethereum volatility falling faster suggests event-driven and speculative positioning is being unwound rapidly,” adding that it is “a sign that near-term sharp-move risk is easing rather than building.”

Still, the market is noting that shrinking volatility does not necessarily imply a trend of gains or losses. While the options market is currently pricing in a ‘quiet market’ in the near term for both Bitcoin and Ethereum, some interpretations suggest there remains a possibility that Ethereum could still see somewhat larger price swings than Bitcoin.