November 3rd Weekly Report - Implied Volatility Declines, New Market Strategies for the End of the Year

Weekly Report Date: November 3, 2025

Important Reminder: Opinions and information are for reference only and do not constitute investment advice for anyone.

Strategy Recommendation: BTC Reverse Bullish Calendar Spread

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Gate Options Underlying Asset Trend Review

The overall spot market’s 7-day average trading volume has continued to decline rapidly for two weeks and remains at a low level.

Entering the final week of October, performance remains relatively stable but lacks clear direction. The market is further choosing a direction after two major events: the announcement of interest rate cuts at the end of October and the trade détente signals from the meetings of the two largest economies; both have a decisive impact on short-term risk appetite.

In the past week (October 27–November 3), as the government shutdown prolongs, key economic data cannot be released, and policy transparency decreases. Caution has increased regarding whether to cut interest rates in December, with the market’s probability of a 25 basis point cut in December falling from about 90% to approximately 67.3%.

Meanwhile, trading volume rebounded in October, indicating that market activity has not completely dried up.

In terms of capital structure, existing inflows show characteristics of being “more disciplined and dominated by institutional products”—for example, the cumulative net inflow into Bitcoin spot ETFs this year has driven the price foundation but also exposed reliance on leading products (such as BlackRock), with some trading days experiencing short-term net outflows, revealing fragility and concentration risks in capital flows. If future net inflows spread across a broader range of products and managers, it would be more conducive to sustainable market trends.

Trading advice emphasizes event-driven strategies: within uncertain windows, control positions and prefer using options (buying volatility/protective puts) or building positions in small batches repeatedly to cope with liquidity and directional uncertainties.

Bitcoin (BTC) Options Market Summary

Regarding BTC spot performance: over the past week, Bitcoin’s price has oscillated within the $108,000–$115,000 range, showing a pattern of high-level consolidation and short-term probing downward. The price dipped near $108,000 multiple times but was supported by short-term buying, indicating short-term market resilience. The $115,000–$120,000 range still faces significant selling pressure; breaking through in the short term requires stronger capital inflows or macroeconomic favorable support.

In the options market: The latest publicly available data shows an implied volatility (IV) of 44.3%, which has fallen from recent highs and stabilized, indicating market expectations of future price fluctuations are converging.

The implied volatility (IV) of near-term and longer-term options has returned to more rational spreads, suggesting short-term market expectations for volatility are becoming more rational.

In block trading: The largest strategy this week, accounting for 36.7% of volume, is a bullish calendar spread. During the week, 1,300 BTC were traded in block transactions, involving buying BTC-281125-114000-C and selling BTC-261225-124000-C, a reverse bullish calendar spread strategy, with a premium expenditure of $920,000, indicating speculation on short-term upside and a bet against volatility.

The 25-Delta Skew of BTC options remains overall in the negative zone this week, indicating ongoing defensive sentiment against downside risks. The options skew term structure has flattened, reflecting increased hedging demand for short-term downside rebounds.

Overall, long-term BTC options still lean toward a bearish bias, with institutional investors favoring risk hedging rather than betting on significant price increases. The market remains cautious about medium- and long-term trends.

Bitcoin (BTC) realized volatility has risen to about 40, and the VRP (IV−RV) has narrowed to 2.18 vol, compared to last week’s panic period at −7.38 vol, indicating a flattening trend. Currently, implied volatility (IV) exceeds realized volatility (RV), maintaining a positive VRP structure. This suggests the market is pricing in higher future volatility, making strategies that sell volatility (Long Vol) such as Short Straddle, Short Calendar Spread, or other Vega-negative structures relatively attractive.

Ethereum (ETH) Options Market Summary

During this cycle (October 27–November 3), ETH has oscillated within the $3,700–$4,250 range, with early-week pressure near the upper boundary at $4,250, followed by a pullback to support around $3,700. The weekend saw weak rebounds, forming a pattern of “range-bound consolidation + rebound attempts.” Short-term investors should focus on whether support at $3,700 holds and whether resistance at $4,250–$4,300 can be broken to determine future short-term trends.

In the options market: The latest data shows an implied volatility (IV) of approximately 69%, which has fallen from previous levels and stabilized, reflecting a calmer market sentiment and reduced expectations of large future swings.

The spread between near-term and longer-term IV has returned to more rational levels, indicating short-term expectations of volatility are becoming more rational.

In block trading: The largest transaction this week, accounting for 18.9% of volume, was a buy put calendar spread strategy, reflecting investors’ low-cost positioning for distant out-of-the-money bearish strategies. The largest volume involved selling ETH-071125-3700-P and buying ETH-261225-3700-P. Additionally, investors are betting on a short-term rebound at the end of the month, with the largest volume of 29,000 ETH in buy ETH-281125-4000-C contracts, with a premium expenditure of $8.84 million.

The 25-Delta Skew of ETH options showed a clear steepening in the short term this week, reflecting increased hedging demand against short-term downside risks; by the weekend, the term structures gradually flattened, indicating that while bearish sentiment has eased, short-term puts still carry significant premiums. During this period, implied volatility of puts once exceeded calls by about 7 vol, then converged to near 5 vol, showing persistent bearish bias.

ETH’s realized volatility has fallen to about 60, and the VRP (IV−RV) has risen to 7.52 vol, indicating that in the context of recent risk appetite recovery, short-term implied volatility has increased. Currently, implied volatility (IV) exceeds realized volatility (RV), meaning the market is pricing in higher future volatility, favoring bearish strategies such as selling options structures to generate Theta or Vega short positions.

Summary of Policy Events and Market Impact

1. U.S. government shutdown risk increases. As of November 3, the federal government shutdown has lasted nearly 35 days, with expected GDP losses in Q4. Due to delayed data releases (such as employment and inflation), liquidity uncertainty and policy expectation ambiguity pose risks to the market.

2. The Federal Reserve’s December rate cut expectations have been delayed. At the end of October, the Fed lowered the federal funds rate by 25 basis points to 3.75–4.00%, explicitly stating that whether to cut again in December is “not predetermined.” The market’s probability of a December rate cut has fallen from over 90% to about 70%. This suggests the “liquidity improvement” window may narrow, posing obstacles to risk assets including cryptocurrencies.

3. Limited progress in trade conflict easing but observable. After the U.S.-China meeting in Busan, a phased trade détente was reached, with the U.S. reducing some tariffs, China resuming agricultural imports, and delaying rare earth restrictions, temporarily boosting market sentiment. However, structural disagreements remain, and the relationship is still characterized as “tactical easing, not fundamental improvement.”

4. Cryptocurrency market capital flows show cautious sentiment. Amid weakening rate cut expectations and unchanged liquidity, large net outflows of about $800 million in Bitcoin and related ETFs have occurred recently, indicating that crypto market capital momentum is cautious, and prices are highly sensitive to capital fluctuations.