Derive Pro launches as volatility calms post-conflict, BTC skew signals caution

June 20, 2025 By Nick Forster

ETH short-term ATM implied volatility saw a sharp drop this week, from around 100% to 60%, as the initial market panic from the Israel-Iran conflict began to settle. Despite the continued tension and the Fed’s recent decision, longer-dated ETH vols (ATM 30-180) remained steady, signaling that traders aren’t expecting long-term turmoil.

ETH ATM volatility

Source: Derive.xyz, Amberdata

BTC volatility remained much calmer overall, peaking near 50% (ATM 1 day) before trending down toward 30%. Both ETH and BTC show a typical contango structure, with short-term vols more sensitive to immediate events.

BTC skew (25 delta C–P) stayed firmly negative, around -3%, especially on short-term expiries. This indicates a persistent demand for puts, likely a hedge against further geopolitical risk, a sentiment that hasn’t shifted much since early in the week.

Option market insights (BTC focus)

BTC options open interest continues to lean bullish. On Derive.xyz, calls now outnumber puts nearly 2:1, with a noticeable build-up on the September 26 expiry. This call-heavy structure could either reflect directional bullish positioning or complex strategies like risk reversals or overwriters.

Outlook

In the near term, the dramatic drop in ETH volatility could create conditions for a breakout, especially if Middle East tensions ease further.

In the medium-term, pay attention to that September 26 expiry buildup in BTC, as it could trigger volatility as we approach. ETH’s more reactive IV also makes it a good forward indicator of sentiment shifts.

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