Breaking Down Deribit's DVOL: Volatility Rises Amid Market Recovery

IconCryptoNewsTerminal Staff22 Jul, 2024

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Breaking Down Deribit's DVOL: Volatility Rises Amid Market Recovery

Deribit's BTC price volatility index (DVOL) has surged to 67.24, signaling an increase in volatility over the past fortnight. This uptick coincides with a gradual recovery in market sentiment, according to Lin Chen, Deribit's Asia business development manager. Last month, the DVOL had dipped below 50, a level it had not breached since November 2020. The recent surge suggests that traders are anticipating increased price swings in the near future. The DVOL is a measure of the expected volatility of Bitcoin prices over the next 30 days, derived from Deribit's options market data. It provides insights into market participants' expectations and helps traders gauge potential price movements. The rise in DVOL aligns with the broader market sentiment, which has been improving in recent weeks. Positive developments such as increased institutional adoption, regulatory clarity in certain jurisdictions, and the upcoming Ethereum Merge have contributed to this recovery. As volatility remains elevated, traders are advised to manage their risk exposure accordingly and monitor market developments closely.

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