Is Bitcoin Volatility Vacation Over? Chart Suggests So, Analysts Cite 3 Catalysts

What to know:

• Bitcoin volatility index, BVIV, has blown past trendline resistance, pointing to increased price turbulence.
• Analysts cited several factors, including shift in market flows, thin liquidity and macro concerns as catalysts that could keep volatility high in the near-term.

Bitcoin's volatility, in hibernation for much of 2025, is stirring awake, signaling a phase of heightened price swings and uncertainty.

The shift is evident in Volmex's 30-day implied volatility index (BVIV), derived from options pricing. The BVIV recently surged past a trendline characterizing the year-to-date decline from an annualized 73%, confirming what aficionados of technical analysis would call a bullish breakout. The technical pattern means volatility could continue to rise in the days ahead, implying increased market turbulence.

Analysts agree with the chart’s signal, citing shifts in market flows, weaker liquidity, and ongoing macroeconomic concerns as key reasons why volatility is likely to stay elevated in the near term.

Diminishing volatility sellers

Long-standing volatility sellers – including OG holders, miners, and whales – had been dampening price swings by aggressively call overwriting throughout 2025, according to Jimmy Yang, co-founder of institutional liquidity provider Orbit Markets.

This strategy, aimed at generating yield on top of spot holdings, helped drive implied volatility down earlier in the year. However, since the sharp Oct. 10 selloff, when bitcoin dropped from nearly $120,000 to $105,000 and altcoins plunged by more than 40%, these players have retreated.

The retreat means fewer call overwrites are weighing on implied volatility (IV). Meanwhile, traders are increasingly snapping up out-of-the-money puts below $100,000, pushing the IV higher, as reported by CoinDesk.

"The typical volatility sellers—big whales, OG holders and miners—have notably stepped back, consistent with their tendency to sell call options only in rising markets. On the other side, demand for downside put protection has picked up among institutional investors as spot prices continue to drift lower," Yang told CoinDesk.

"Overall, the combination of limited vol supply, increased downside hedging demand, and a structurally weaker liquidity environment suggests that elevated volatility levels could persist in the near term," Yang added.