How Does Implied Volatility (IV) Typically Behave during a Market Crash and a Subsequent Bounce?

During a market crash, implied volatility (IV) typically spikes dramatically (known as "volatility clustering") as fear and uncertainty increase. During a dead cat bounce, IV usually contracts slightly as the temporary price stability reduces immediate fear.

This IV contraction can make options cheaper to buy, but it also negatively impacts the value of existing long option positions (long puts).