Bitcoin's 30-day implied volatility has fallen to 36%, its lowest level in a long time, but low volatility does not necessarily mean lower risk, CoinDesk reported. This is because low volatility also leads to lower trading costs, prompting investors to build large directional bets and hedge positions, thus exposing market makers to significant risk. Once the market starts to move, both sides manage increasingly more positions, which further exacerbates price volatility. Paul Howard, an official at market-making firm Wincent, said, "The weakening demand for put options and simultaneously the lack of strong buying interest for upside risk suggest that we are approaching the lowest price levels in this bear market. We will bottom out in a few weeks."
