Yahya 
After Bitcoin’s price fell below $50,000, a significant Bitcoin volatility indicator reached its highest level in 20 months, prompting futures investors to prepare for a potential decline in the cryptocurrency’s price.
Highest Volatility Since FTX Collapse
The Bitcoin Volmex Implied Volatility Index reached 97.14 on August 5 as Bitcoin briefly dropped to $49,813, according to CoinMarketCap data. This level of volatility had not been seen since the collapse of the cryptocurrency exchange FTX in November 2022. Although Bitcoin rose to $56,892 at the time of publication, futures investors continued to speculate about a possible further decline.
Futures Investors Cautious
Tyr Capital’s chief investment officer Ed Hindi said, “Investors are aggressively buying put options and put spreads on both BTC and ETH to protect their positions from further downside.” The put-call volume ratio, which measures the demand for Bitcoin’s put (sell) and call (buy) options, currently indicates a 46.94% call and 53.06% put ratio over the last 24 hours, pointing to a 1.13 put-call ratio, according to CoinGlass data.
“The put curve is extremely well-bid. This could be a sign that the market is overly stretched” Hindi added, noting that he expects further declines but believes they “won’t exceed” $45,000.
Mixed Sentiments in the Market
Despite high volatility, not all investors anticipate a prolonged decline. An anonymous crypto investor named Yoddha declared that 2024 could be “the best buying opportunity.” Additionally, Bitcoin options volume fell by 39.73% within 24 hours on August 6, indicating that future investors are uncertain about Bitcoin’s price direction.
“An aggressive sell-off assumes the price will pause for a while and give us a range” wrote an anonymous crypto investor RektProof on X on August 6. “Expect a BIG reversal soon,” added Bitgrow Lab founder Vivek Sen.
The market shows a mixed outlook, with some investors preparing for further declines, while others expect sideways movement or a recovery in the near term.
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