The recent fake news incident orchestrated by the SEC had a significant impact on Bitcoin’s (BTC) volatility, resulting in a more peculiar turn of events than anticipated. The sudden volatility led to a notable increase in the RV (Realized Volatility), but surprisingly, the IV (Implied Volatility) experienced a slight decrease.

This data’s logic deviates from the norm due to the active trading of the ETF for over a month, with a considerable number of investors placing bets on its performance, causing short-term IV to reach recent highs, reports Greeks.Live.

Courtesy: Greeks.Live

The dissemination of false news by the SEC had a dual effect. Firstly, it made evident to a majority of investors that the ETF’s influence on BTC was limited. Secondly, it further drained the already fragile momentum from the market, prompting many investors to execute deleveraging operations and reduce positions, opting for an early “sell the news” strategy.

Mixed Signals in the BTC Market

Speculation surrounding the imminent approval of a Bitcoin Exchange-Traded Fund (ETF) has fueled FOMO sentiment, leading Bitcoin to reach a new high of $47,000 during US trading hours. However, the options market is presenting a mixed picture.

Short-term Implied Volatilities (IVs) experienced a significant drop, particularly the current At-The-Money (ATM) option IV for the 11th of June, which fell below 90%, marking a 30% decrease in just a few hours. Other terms in the options market also displayed notable declines.

Despite the surge to new highs, block trades, a significant aspect of market dynamics, remained relatively muted. The market observed a dominance of selling calls and buying puts during this breakout.

Interestingly, as institutional investors began shorting the ETF market at its peak momentum, questions arise about the future trajectory of Bitcoin. The contrasting signals in the options market and block trades add an element of uncertainty to the overall outlook, leaving investors and traders closely monitoring developments in the Bitcoin market.