What are the key factors that affect the implied volatility graph of cryptocurrencies?

1 answers

• Tusiime MercyDec 16, 2024 · 7 months ago
  The implied volatility graph of cryptocurrencies is affected by various factors, and one of them is market sentiment. When investors are optimistic about the future prospects of cryptocurrencies, the implied volatility tends to increase as more people are willing to buy and sell at different prices. Conversely, when there is negative sentiment or uncertainty in the market, the implied volatility may decrease. Additionally, external events such as economic news, geopolitical tensions, or major regulatory changes can have a significant impact on the implied volatility graph. For example, the announcement of new regulations or bans on cryptocurrencies in certain countries can cause a sharp decline in implied volatility. It's also worth mentioning that the implied volatility graph can vary across different cryptocurrencies, with some being more volatile than others due to factors specific to their respective markets.
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