Bitcoin and Ethereum's short-term implied volatility (IV) has surged to recent highs, with BTC's IV exceeding 65% and ETH's surpassing 80%. This increase comes as market participants brace for heightened volatility due to geopolitical tensions affecting global oil transportation. Military actions by the U.S. and Israel against Iran in the Strait of Hormuz have disrupted oil flows, contributing to market uncertainty.
Additionally, the market is on edge ahead of key U.S. economic data releases this week, including February's CPI data, unemployment figures, and the January PCE price index. The demand for downside protection has grown, as indicated by a significant decrease in skew, reflecting rising expectations of market volatility this month.
Bitcoin and Ethereum Implied Volatility Peaks Amid Geopolitical Tensions
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