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According to industry analysts, Bitcoin futures investors are preparing for a slowdown in market activity during the summer months.
Analysts Say Bitcoin Options Expect to Slow Over Summer
“Summers are typically periods of low volatility and investors start taking positions based on their biases,” said Bitfinex Futures Manager Jag Kooner.
Kooner stated that Bitcoin's volatility has decreased significantly since mid-April.
Data from the Data Dashboard also supports this, showing that the volatility of Bitcoin options for one-week, one-month and multi-month maturities dropped from 77% to below 60%.
Ethereum options volatility has also decreased to a similar extent as Bitcoin since mid-April.
Bartosz Lipiński, CEO of Cube.Exchange, interprets Ethereum's decline as a sign that investors are waiting for price fluctuations to calm down while waiting for Ethereum's regulatory status in the US to become clear.
“Typically, when there is uncertainty, investors become risk-averse, move into cash and sit on the sidelines, and I wouldn't be surprised if a similar situation is true for Ethereum,” Lipiński said in a statement.
Lipiński added that due to uncertainty about Ethereum's status in the US, whether it is considered a security or not, many investors will either stay on the sidelines or seek opportunities elsewhere until the situation becomes clearer.
However, Lipiński warned that in the summer months, when transaction volumes are low, volatility may increase due to liquidity gaps in the market.
“The summer months can be a relatively quiet period, as stock markets often are, but one only has to look back to 2017, the DeFi summer, and the last major bull run to see the effects of low liquidity on relatively bullish crypto markets,” he added.
*This is not investment advice.