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Deribit DVOL: Reaches Maximum in 16 Months with Increase from 41% to 76%

Deribit DVOL: Reaches Maximum in 16 Months with Increase from 41% to 76%

TL;DR

  • Deribit’s DVOL reaches 16-month high: from 41% to 76% in one month.
  • Volatility drives call overwriting strategies.
  • Options activity reflects rising long-term confidence, with strike prices as high as $200,000.

The Deribit Bitcoin Volatility Index (DVOL) has reached an important milestone by recording a substantial increase, reaching its highest level in 16 months.

This increase in volatility, as measured by the implied volatility of Bitcoin options over a 30-day period, represents encouraging news for Bitcoin investors looking to expand their income in the options market.

According to the data provided, the DVOL has gone from 41% annualized to 76% in just one month, marking its highest level since November 2022.

This increase in implied volatility has positively impacted Bitcoin options prices, as higher volatility translates into higher option premiums.

This has led to renewed interest in strategies such as call overwriting on Deribit

Call overwriting involves selling call options at prices higher than the current market price of the underlying asset, allowing investors to generate additional income on their spot market holdings.

Deribit registers maximum volatility in 16 months

This approach has become even more attractive with the recent surge in call options trading activity on Deribit, with trades recorded at price levels as high as $200,000.

Trading activity on Deribit has seen a significant increase, driven in part by the 58% rise in the price of Bitcoin this year, which has seen it approach its all-time highs.

Total open interest in cryptocurrency futures and options on Deribit has reached a new high of $32 billion, with the options market contributing almost $30 billion to this figure.

In terms of future prospects, some experts predict that Bitcoin’s current bullish trend could see it reach levels as high as $200,000 by September 2024.

This is reflected in the increase in call options trading activity on Deribit, where interest is seen in options with long-term expirations, even for price levels of $200,000.

The increase in implied volatility and Bitcoin options trading activity on Deribit signals renewed investor interest in strategies to capitalize on market volatility and generate greater profits in a constantly evolving market environment. 

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