Analysis: Institutions Are Overly Optimistic About the Crypto Market, History Suggests the Bottom Has Not Yet Arrived

PANews reported on February 10 that Adam, a macro researcher at Greeks.live, posted on X stating that the crypto market has stabilized somewhat, with a significant decline in major term IV, but the actual volatility RV over the past week remains high. This has resulted in a record average drop of 45% in the one-week level VRP. Specifically, the data shows a decrease from last week's +20% level to the current -25% level, which is quite rare. This means the market is rapidly lowering its expectations for volatility, and the pace is a bit too fast, considering bitcoin's volatility tends to be highly clustered. Institutions are somewhat overly optimistic about the market, and this lack of caution could leave them very passive if faced with a second round of decline. The degree of irrationality in the options market has clearly increased, and institutions have been stunned by the recent market movements. Historically, such situations often indicate that the bottom has not yet arrived.