Recently, the price of Bitcoin has experienced multiple surges and pullbacks of over a thousand dollars within a few days, with significant intraday volatility. Accompanying this is the rise in the implied volatility curve and trading volume in the options market. The continuous creation and redemption of the U.S. spot ETF, fluctuations in macro interest rate expectations, and the repeated pricing of the "new cycle logic" post-halving have put the entire volatility structure into a highly sensitive state. From the options data of mainstream exchanges like Deribit to the capital flows of spot ETFs and the liquidation data of on-chain leverage, this round of volatility is not isolated price noise but a concentrated expression of global capital repricing Bitcoin's risk premium under the new regulatory framework and depth of derivatives.

Direct Triggers for Rapid Increase in Volatility

● News-driven: Recently, multiple macro and regulatory events have triggered an increase in volatility, including repeated expectations regarding the Federal Reserve's interest rate path, significant net outflows from the U.S. spot Bitcoin ETF followed by a rapid return to net inflows, and market disagreements on the timing of the next round of global easing.
● Surge in options IV: Research Brief shows that on mainstream trading platforms, Bitcoin's implied volatility for near-term options (1 month) rapidly rose from about 45% to nearly 70%, with short-term (within 7 days) IV peaking at 80%+, significantly higher than the previous central level.
● Realized volatility follows: Taking the 7-day annualized realized volatility as an example, it recently climbed from below 30% to around 60%, with high-frequency price spreads and slippage in the order book increasing, raising the short-term trading costs in both spot and futures markets.
● Leverage liquidation amplifies volatility: During a single-day price pullback, the total contract liquidation scale across the network exceeded several hundred million dollars, with concentrated long and short leveraged positions leading to amplified instantaneous price drops, further pushing up subsequent IV quotes.
● Trading volume resonance amplifies: Bitcoin's average daily trading volume increased by about 30%-50% compared to the previous month, with a significant rise in the proportion of options trading, and high Delta, high Gamma contracts seeing increased volume, becoming the trading vehicle for this round of rising volatility.

Options Implied Volatility Structure and Trader Expectations

● Term structure shifts from "flat" to "front high and back low": Research Brief data shows that Bitcoin options' short-term (7-14 days) IV is now significantly higher than that of 1-3 month terms, forming a "front-end bulge" in the term structure, reflecting traders' greater concern about short-term uncertainty while having relatively mild expectations for medium to long-term volatility.
● Skew indicates increased demand for downside protection: The 25-delta put-call skew has shifted from being close to neutral to clearly favoring more expensive put options, indicating an increase in demand for protective put options, with funds willing to pay higher premiums for downside protection.
● Gamma trading intensifies short-term fluctuations: In a short-term, high IV environment, market makers and institutions engage in more frequent Gamma hedging, with Research Brief noting key price levels having concentrated option positions (e.g., whole thousand dollar levels), and once approaching the strike price, Delta adjustments significantly impact the order book and transactions in spot and perpetual contracts, amplifying short-term volatility.
● Trading structure leans towards short-term speculation: Currently, the most actively traded contracts are concentrated in 7-day and current month expirations, with the proportion of OTM (out-of-the-money) high-leverage call/put options increasing, making these "lottery-style" positions much more sensitive to short-term market direction and magnitude than medium to long-term capital allocations.
● Implied volatility premium widens: Recently, short-term IV has been significantly higher than the corresponding realized volatility, with Research Brief estimating IV-RV premium fluctuating in the range of 10-20 points, indicating that sellers can obtain a higher "volatility risk premium," but also bear the tail risk of extreme market conditions.

The Resonance Relationship Between ETF Capital Flows and Volatility

● ETF creation and redemption rhythm creates price "pulses": The U.S. spot Bitcoin ETF recorded net outflows of several hundred million dollars on certain trading days, followed by similar magnitude net inflows within a few days, with this "outflow-waiting-return" rhythm highly synchronized with Bitcoin's sharp price rises and falls.
● Direction of capital flows affects the linkage between spot and derivatives: When the ETF experiences significant net purchases, market makers and arbitrageurs need to build positions in the spot and futures markets to hedge, pushing up the basis and short-term IV; conversely, during net redemption phases, reverse liquidation and selling compress the basis and elevate demand for protective put options.
● Institutional capital preferences influence term structure: Research Brief points out that the capital behind the ETF is primarily medium to long-term allocation and strategy funds, with its entry and exit more related to macro asset allocation rather than intraday speculation, making the pricing of 1-3 month term IV more influenced by the "asset category" perspective, while being more tradeable than short-term IV.
● ETF scale and liquidity's "volume effect": The total holdings of the spot ETF have reached hundreds of thousands of Bitcoins, with daily net inflows/outflows of thousands being able to have a substantial impact on the market's marginal liquidity. During periods of relative liquidity tightness, such increases or decreases can easily be amplified into significant price and volatility changes.

How Macro and Regulatory Sentiment Amplifies Volatility

● Fluctuating interest rate expectations lead to cross-asset rebalancing: Research Brief indicates that market expectations regarding the timing and pace of the Federal Reserve's first rate cut have recently shown significant reversals, leading to adjustments in government bond yields and tech stock valuations. As a high-beta risk asset, Bitcoin often experiences amplified volatility during such macro expectation shifts.
● Regulatory news creates emotional "thresholds": Whether regarding the advancement of cryptocurrency regulatory legislation or enforcement actions against specific platforms and projects, any news falling into the "gray area" can easily trigger a situation of short-term panic selling and concurrent risk-averse buying, causing short-term spikes in volatility.
● Macro risk-averse narratives conflict with risk asset attributes: As geopolitical tensions and currency devaluation concerns rise, Bitcoin is viewed by some funds as a hedging tool, while simultaneously facing passive liquidation during global risk asset pullbacks; this "identity conflict" is reflected in data as simultaneous increases in capital inflows and outflows, with more frequent directional switches.
● U.S. stocks and tech sector linkage amplifies: Research Brief shows that recently, the short-term correlation between Bitcoin and the Nasdaq, as well as some tech giants, has increased, and when tech stocks experience valuation fluctuations, correlated trading strategies will adjust crypto exposure accordingly, exacerbating short-term volatility in Bitcoin.

The Game of Bullish and Bearish Views on Volatility

● Optimistic/supportive side: They believe this is a necessary phase of asset repricing, with rising short-term IV and ETF capital flow fluctuations seen as "noise range" before institutions gradually establish larger long positions. They emphasize:
● Although current IV is higher than before, it still has room relative to historical extremes;
● The depth of ETFs and options has enhanced market absorption capacity, which is beneficial for reducing systemic risk in the long run;
● The widening IV premium provides considerable returns for selling volatility strategies, suitable for professional funds with controllable risks.
● Pessimistic/opposing side: They worry that the rise in volatility reflects structural fragility, not healthy price discovery. They focus on:
● High short-term IV and concentrated Gamma mean prices can easily be pushed up or down through a small amount of incremental capital;
● The severe two-way fluctuations in ETF capital flows may indicate increasing pricing discrepancies of traditional capital towards Bitcoin;
● In times of heightened macro uncertainty, high volatility may suppress more conservative capital from entering, locking Bitcoin within the "high-risk asset" framework.

Deep Logic: Volatility is Not Isolated Noise

The significant rise in volatility this time is not simply triggered by a single piece of news or a solitary liquidation event, but is the result of the interplay of the current macro monetary environment, institutionalization process, and the depth of the derivatives market. On one hand, the repeated fluctuations in macro interest rate structure and liquidity expectations have forced high-beta assets like Bitcoin to oscillate between "risk-averse narratives" and "risk asset repricing"; on the other hand, the volume increase of spot ETFs and the maturity of the options market have provided funds with more tools to construct complex positions—this not only enhances the market's absorption capacity and hedging efficiency but also significantly increases the sensitivity of short-term prices to emotions and events. When an asset is simultaneously included in traditional asset allocation frameworks, possesses a deep derivatives market, and carries macro and regulatory expectation games, its volatility is no longer a single-point event but a comprehensive reflection of the entire global capital structure, risk preferences, and changes in the institutional environment.

Outlook and Key Focus for the Future

In the short term, the market will focus on three key dimensions: First, the interest rate paths and liquidity signals from the Federal Reserve and major economies, which will directly affect traditional capital's classification and position weight of Bitcoin; second, the ongoing creation and redemption data of the U.S. spot ETF and the changes in the underlying capital structure, which determine the central impact of spot buying/selling on prices; third, the changes in the IV term structure and Skew in the options market, especially whether short-term IV continues to remain high and whether the IV-RV premium converges, which will provide directional clues for volatility trading strategies. For participants, during the phase when volatility returns to high levels, it is crucial to clarify whether they are in the role of "buying volatility" or "selling volatility," understanding how ETF capital and derivatives structure jointly shape price paths, rather than making emotional decisions solely based on short-term candlestick patterns.

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