Derive Predictions Update: April 30th 2025

Traders Snapping Up Cheap Leverage as Volatility Drops

April 30, 2025, by Dr. Sean Dawson

As the market continues to fluctuate, volatility has recently dropped to the lowest level in the past week, creating an opportunity for traders to take advantage of cheaper leverage. With implied volatility (IV) for both Bitcoin (BTC) and Ethereum (ETH) dropping significantly, traders on Derive.xyz are capitalizing on this shift by heavily buying call options, signaling a strong bullish sentiment. 

While the broader market remains uncertain, with BTC's 25 delta skew reflecting mixed sentiment, traders on Derive are betting on price increases for both major assets. This blog will dive into the current market dynamics, volatility trends, and price predictions for BTC and ETH as we head into May.

BTC's 7-day and 30-day implied volatility (IV) have fallen from 53% to 38% and from 50% to 43%, respectively, marking the lowest point in the last week. 

BTC 7-day and 30-day implied volatility (IV) 

Similarly, ETH saw a drop from 74% to 61% (7-day) and from 69% to 63% (30-day). This sharp drop in the 7-day volatility suggests a brief period of reduced volatility, with the next month potentially seeing lingering volatility.

ETH 7-day and 30-day implied volatility (IV) 

On Derive.xyz, traders are capitalizing on this cheap leverage. A staggering 73% of all BTC options premiums are being used to buy calls, with ETH seeing an even higher percentage at 81.8%. 

The sentiment on Derive is extremely bullish, with calls outnumbering puts by 4x for ETH and 3x for BTC. This bullish sentiment stands in contrast to the broader market, where the normalized 25 delta skew for BTC remains neutral at 0.5%, suggesting mixed market sentiment. This indicates that while Derive traders are betting heavily on price increases for both BTC and ETH, the broader market is more uncertain.

In terms of price predictions, the outlook for BTC remains stable, but the likelihood of a downside is becoming more bullish. The chance of BTC settling above $110K by May 30 remains at 11%, while the likelihood of BTC dropping below $80K has decreased from 11% to 8%.

For ETH, the chance of it settling above $2,300 by May 30 remains at 9%, with the chance of it falling below $1,600 has dropped from 24% to 21% in the last 24 hours.

While the broader market remains cautious, Derive traders are betting heavily on the upside, fueling further momentum leading into May.