Share this article
Bitcoin Storm Could Be Brewing, Crypto OnChain Options Platform Derive Says
BTC currently faces low volatility, but a storm could be coming, Derive's Nick Forster said.
Updated Mar 18, 2025, 7:54 a.m. Published Mar 18, 2025, 7:46 a.m.
Make us preferred on Google
What to know:
- The crypto market's current calm could be short-lived, potentially leading to significant price volatility, according to insights from Derive, a decentralized crypto on-chain options platform.
- Several factors could trigger this volatility, including developments in Ukraine, shifts in crypto regulatory policy under the Trump administration, and the Federal Reserve's rate decision.
- Despite market expectations for two to three rate cuts this year, potential Federal Reserve rate cuts could be limited, reflecting U.S. recession fears and persistent inflation, according to BlackRock.
The calm that has returned to the bitcoin market may be short-lived, potentially setting the stage for a storm that could trigger significant price volatility, according to insights from the decentralized crypto on-chain options platform Derive.
Since March 12, BTC has settled in the $80K-$85K range in a consolidation typically seen after a notable directional move. Prices tanked from $100K to under $80K in preceding weeks due to several factors, including President Donald Trump's tariffs and disappointment about the lack of new purchases in the U.S. strategic BTC reserve.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
With the latest consolidation, key volatility metrics have declined, nearing monthly lows. Volatility, however, is mean-reverting, meaning the low-volatility regime could soon pave the way for price turbulence, according to Derive.
"BTC’s weekly at-the-money (ATM) volatility has dipped below 50% to 49%, approaching monthly lows of 45%. Realized volatility has also dropped from 91% at the start of the month to 54% today," Nick Forster, founder of Derive, wrote in a recent note shared with CoinDesk.
It is important to remember that volatility is price agnostic, meaning that the expected increase in volatility does not indicate the direction of the price movement in bitcoin.
“Volatility is mean-reverting, so we can expect it to rise soon, likely to levels seen in February (60-70%)," Forster added.
Whether prices rise or fall, volatility can increase, suggesting that significant price swings could occur in either direction.
According to Derive, several factors could trigger volatility, including "a ceasefire (or lack thereof) in Ukraine, or significant shifts in crypto regulatory policy under the Trump administration."
Derive is the world's leading on-chain AI-powered options protocol with a total value locked of nearly $100 million. The protocol has registered a cumulative trading volume of $15 billion to date.
Wednesday's Federal Reserve rate decision could move markets as well.
The central bank is likely to keep rates unchanged, with traders pricing two to three rate cuts later this year. But a dovish surprise could recharge bulls' engines for a sharp move higher.
Potential Fed rate cuts, however, could be limited, according to BlackRock.
"Markets have priced in about two to three 25 basis point rate cuts this year, versus expectations for just one earlier this year. We think this reflects U.S. recession fears even though economic condition don’t point to a downturn. Even if prolonged uncertainty hurts growth, we still see persistent inflation limiting how much the Fed can cut," BlackRock said in a weekly note.
The expected volatility boom could happen to the downside should equity markets continue to fall, accelerating the decline in crypto prices.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Gold tops $5,000 as bitcoin stalls near $87,000 in widening macro-crypto split: Asia Morning Briefing
Bitcoin’s onchain data points to supply overhang and weak participation, while gold’s breakout is priced by markets as a durable macro regime shift.
What to know:
- Gold’s surge above $5,000 an ounce is increasingly seen as a durable regime shift, with investors treating the metal as a persistent hedge against geopolitical risk, central bank demand and a weaker dollar.
- Bitcoin is stuck near $87,000 in a low-conviction market, as on-chain data show older holders selling into rallies, newer buyers absorbing losses and a heavy supply overhang capping moves toward $100,000.
- Derivatives and prediction markets point to continued consolidation in bitcoin and sustained strength in gold, with thin futures volumes, subdued leverage and weak demand for higher-beta crypto assets like ether reinforcing the cautious tone.
Top Stories
