March Madness in Crypto? BTC and ETH Implied Volatility Surge

  1. Bitcoin (BTC) and Ethereum (ETH) Implied Volatility Surge.
  2. Ethereum Improvement Proposal (IV) Upgrade Could Fuel Market Uncertainty.
  3. Institutional adoption of Bitcoin pushes Implied Volatility higher.

Bitcoin (BTC) and Ethereum (ETH) have seen a notable increase in implied volatility (IV) for March, suggesting that traders are pricing in higher uncertainty and potential price movements for these cryptocurrencies in the coming month.

According to data from Skew Analytics, BTC’s March term IV rose to 82%, while ETH’s March term IV surged to 94%, representing significant increases from their respective 30-day averages.

At the same time, weekly term IV for BTC and ETH remained relatively stable, indicating that traders do not expect immediate catalysts for significant price movements in the short term.

This divergence in IV trends for BTC and ETH has raised concerns among crypto investors, who are now urged to remain vigilant about the markets.

With no significant macro events this week and no breaking news in the crypto space, it is still being determined what is driving the surge in March term IV for BTC and ETH. However, some analysts believe that the upcoming Ethereum Improvement Proposal (EIP) 1559 upgrade, which aims to reduce the network’s transaction fees, could be a potential catalyst for increased volatility in the coming month.

Others suggest that the recent surge in institutional adoption of Bitcoin and the growing acceptance of cryptocurrencies by mainstream financial institutions could be another factor driving the increased uncertainty in the market.

Whatever the cause, the situation underscores the importance of monitoring market trends and staying informed about any developments that may impact crypto prices.

In response to the surge in March term IV, some investors are cautious, opting to hedge their positions or reduce their exposure to crypto assets until the market stabilizes.

Others, however, are taking a more bullish view, seeing the increased volatility as an opportunity to capitalize on potential price movements. 

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Kelvin enjoys writing about cryptocurrency and blockchain. He started blogging in 2019 and switched to cryptocurrency in 2020. Kelvin is interested in technology, football, chess, and Defi. He wants decentralization to benefit everyone on the planet.