Amid mounting geopolitical pressure, we’re seeing classic risk-off behavior with falling prices, spiking volatility and a pullback in upside positioning.
BTC has pulled back over 4% today, from $104,300 to $100,300. We’re also seeing a spike in short-term implied volatility (IV) – up 10% to 45% – as traders begin pricing in fresh risk.
BTC ATM volatility (7 day tenor)
Source: Derive.xyz, Amberdata
“ETH’s drawdown has been even sharper, down nearly 14% from $2,550 to $2,200. That’s been accompanied by a 15-point jump in 7-day IV to 83%, reflecting increased downside hedging and uncertainty.
“Ethereum’s double-digit loss and volatility spike to 83% show just how fast risk can unravel when leverage is high.
ETH ATM volatility (7 day tenor)
Source: Derive.xyz, Amberdata
The surge in short-dated IV – BTC to 45%, ETH to 83% – confirms the market is bracing for more instability. Volatility markets are telling us this isn’t over.
BTC price predictions
The BTC options market is scaling back on optimism. The probability of BTC ending the year above $200K has dropped to 3.5%, down from 4% last week. Bulls are losing conviction as geopolitical risk and macro headwinds overshadow halving optimism and ETF flows.
The chance of BTC reaching above $150K by December 31 has also declined, now sitting at 11% compared to 13% previously.
Meanwhile, the likelihood of BTC closing below $80K remains unchanged at 20%.
Dropping upside probabilities for BTC and a steady 20% downside chance below $80K show the options market leaning defensive. Traders aren’t betting big on upside right now.
Without a clear de-escalation trigger, we expect more cautious positioning and subdued momentum in the month ahead.
