As the Christmas holiday approaches, U.S. stock markets will be closed on Christmas Eve and Christmas Day, with European and American investors stepping back from the markets until after New Year. This week, on Friday, December 26, marks the annual options expiry, with over 50% of total options positions set to expire. Many institutions have opted to roll over their positions early, leading to a noticeable decline in implied volatility (IV) across major maturities since last week.
The combination of reduced volatility, holiday trading patterns, and options expiry has resulted in Bitcoin's major maturity implied volatility dropping by over 5% in the past month, with short- to medium-term IV down more than 10%. Ethereum's IV has seen an even greater decline. These trends indicate a subdued market outlook, with expectations for continued low volatility in the coming weeks, potentially leading to a gradual downward trend.
Bitcoin and Ethereum Volatility Declines Amid Holiday Season and Options Expiry
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