TechFlow News: On February 20, Matrixport released its weekly report stating, “Recently, Bitcoin experienced a sharp decline, causing options-implied volatility to surge temporarily before partially retreating. Bitcoin’s price dropped from near $85,000 to a low near $60,000, then stabilized around $66,000. Meanwhile, the implied volatility for March 2026 expiry surged rapidly from just above 40% to a panic-driven peak nearing 65%, reflecting strong demand for downside protection during the sell-off. Subsequently, implied volatility retreated to approximately 50%, suggesting that some tail-risk hedging is being unwound and short-term pressure has eased.
The crypto market is approaching a critical inflection point: volatility remains elevated, sentiment lingers at extreme lows, and market liquidity continues to drain. Traders are gradually unwinding crash hedges; overall positions have notably lightened, and participation has significantly declined. Historically, this combination of characteristics often precedes the onset of a major directional move. While the macro environment is improving, crypto asset prices have yet to meaningfully follow—such divergence is typically unsustainable over the long term.”
