The encrypted market enters a "dormant period"! Bitcoin's implied volatility hits a nine-month low.

As trading activities slump and speculative funds shift interest away from this largest cryptocurrency, the demand for Bitcoin options for hedging is weakening, and the expected Bitcoin volatility in the market has fallen to the lowest level in nine months. Data shows that the Bitcoin Volmex implied volatility index fell to 36.11 on Monday, the lowest level since September last year, and close to the lowest point since 2023. This index reflects the market's expectations for Bitcoin's volatility in the next 30 days, based on real-time cryptocurrency options prices. Bitcoin implied volatility hits nine-month low This decline comes as Bitcoin struggles to break through the $80,000 mark. Currently, the Bitcoin trading price is around $77,000, down nearly 40% from its historical high of over $126,000 set in October last year. The U.S. spot Bitcoin ETF has seen net outflows of around $1 billion since May, reversing the net inflow trend seen in the previous two months, further indicating waning investor demand. It is worth noting that the continuous outflows from the Bitcoin ETF reveal an unsettling phenomenon in the crypto market structure - the price range that should attract buyers to return has instead become an area where some investors concentrate selling. The massive outflows from the U.S. spot Bitcoin ETF coincided with Bitcoin prices nearing $83,000 - the average breakeven cost for ETF holders overall. Vetle Lunde, research director at cryptocurrency research and brokerage firm K33 Research, said, "In other words, when the Bitcoin price approaches its breakeven cost, massive outflows occur more frequently. We believe this is because market participants are trying to avoid losses." This pain comes from two directions. Investors who fall from high levels near the cost line sell to avoid turning profit into loss, while those who rebound from low levels near the cost line choose to exit with a stop loss after experiencing a significant retreat. In either case, the breakeven cost seems more like a "ceiling" than a "bottom support" - selling pressure tends to concentrate at key moments when price recovery could gain momentum. This situation contrasts sharply with the rise in broader risk assets. As the market expects a resolution to the U.S.-Iran conflict, the U.S. stock market has reached a historic high. At the same time, driven by demand related to artificial intelligence (AI) and semiconductors, the South Korean Kospi index and the Taiwan stock market have also hit new highs. Damien Loh, Chief Investment Officer at hedge fund Ericsenz Capital, said, "The Bitcoin ETF fund flow has always been negative, but the overall environment for risk assets is positive for the market, and I believe these two factors offset each other." Caroline Mauron, co-founder of Orbit Markets, a digital asset derivatives liquidity provider, said, "Bitcoin volatility is approaching historic lows. Retail investors are turning to other areas to find trading opportunities, as evidenced by the outflow data from ETFs." Bitcoin, which shone in 2024 with a mainstream wave of success - including ETF listings, Wall Street endorsements, and inclusion in financial advisers' asset allocation lists - has quietly lost its audience it has been attracting for years in 2026. Retail investors have withdrawn. And as arbitrage trading gradually unwinds, institutional fund flows are also weakening. The ETF, once hailed as a bridge connecting cryptocurrency and traditional finance, has now become a tool for investors to efficiently exit the market, just as they entered the market efficiently. Therefore, the current crypto market is in a delicate state: on the one hand, large mechanical buying supports the bottom; on the other hand, the market tends to sell on each rebound. This combination makes market momentum exceptionally difficult to sustain, regardless of whether it is rising or falling. Furthermore, the decline in Bitcoin implied volatility also reflects a recurring pattern in this cycle - whenever price volatility intensifies, it quickly attracts "selling volatility" traders, thereby depressing option premiums. Rajiv Sawhney, International Portfolio Management Director at digital asset advisory firm Wave Digital Assets, said that selling volatility has become one of the most representative trades in recent months, with investors repeatedly entering to sell after volatility spikes, making it difficult for Bitcoin to sustain breakthroughs in trends. He said, "Bitcoin itself does not generate intrinsic returns, so selling volatility has become a way for long-term holders, miners, sovereign investors, and large funds to generate returns from holdings." The broader macro environment is also dampening Bitcoin's trading activity. Rajiv Sawhney said that speculative funds are now flowing more into AI and storage chip concept stocks, leading to a decrease in "hot money" flowing into the crypto market. Lower trading volumes typically suppress actual volatility, further pulling down implied volatility.