Bitcoin 
$91,474.18 and volatility indicators in the S&P 500 index decreased significantly. This indicates that risk appetite may revive at a time when expectations that the Fed will cut interest rates in December are strengthening. As the price of Bitcoin rises above $91,000, the strengthening of the inverse correlation with volatility indices increases the perception of stability in the market.
Volatility Drop Supports Markets
Volmex’s options-based 30-day Bitcoin volatility index BVIV fell back to the annualized level of 51 percent after rising as high as 65 in mid-November. During the same period, Deribit’s DVOL indicator similarly dropped. 30-day volatility indicator of S&P 500 VIX While it climbed to 28 percent in the week of November 21, it has fallen to 17 percent today. This resulting table is both cryptocurrency It also shows that the panic in the stock markets has dissipated and buyers are starting to take control again.
The decrease in volatility reflects that the upward trend is coming to the fore in the markets’ search for direction. While the price of Bitcoin has recovered more than 10 percent in the last week, rising above the $91,000 level, the decrease in volatility points to a structure similar to the stability seen in traditional assets. This trend reveals that Bitcoin, as a maturing financial instrument, has begun to act more in line with macro market dynamics.
Fed Interest Rate Cut Expectations Increased Risk Appetite
The dependence of the markets on “cheap liquidity” stands out behind the decline in volatility. While the probability of a 25 basis point interest rate cut at the Fed’s December meeting decreased to 39 percent last week, it has increased to 87 percent with the latest data. Research director of Derive platform Dr. Sean DawsonAccording to , this change has led to a significant weakening of fear indicators in the options market.
Deribit And Derive According to the data, the tendency in favor of puts in the one and four-week trading option balance for Bitcoin narrowed to -5 from -10 last week. Although investors still continue to pay a premium for downside protection, defensive positions have begun to unravel as volatility declines. “Markets are balancing on a knife edge, but sentiment has improved significantly with the expectation of an interest rate cut from the Fed,” said Dawson.
