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Calm Before the Storm Expected as Bitcoin Volatility Wakes Up
BTC’s implied volatility jumps from 33 to 37 after hitting multi-year lows, raising the odds of a bigger market move ahead.
Updated Aug 11, 2025, 7:20 p.m. Published Aug 11, 2025, 10:04 a.m.
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What to know:
- DVOL index spikes to 37, up from last week’s 26% low, historically a precursor to sharp price swings.
- Spot-driven weekend rally from $116,000 to $122,000 suggests underlying strength as open interest trends lower.
Bitcoin’s implied volatility (IV) has moved from 33 to 37 on Monday, a notable uptick from multi-year lows and a possible signal that the market’s long stretch of calm is nearing an end.
The Deribit Volatility Index (DVOL), modeled after the VIX in traditional markets, tracks the 30-day implied volatility of bitcoin options and now sits at its highest level in weeks.
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Implied volatility represents the market’s forecast for price swings, calculated from option prices. In formal terms, IV measures the one-standard-deviation range of an asset’s expected movement over a year. Tracking at-the-money (ATM) IV offers a normalized view of sentiment, often rising and falling alongside realized volatility.
Last week, BTC’s short-term IV fell to around 26%, one of the lowest readings since options data began being recorded, before rebounding sharply. The last time volatility sat this low was August 2023, when bitcoin hovered near $30,000 shortly before a sharp move higher.
Over the weekend, bitcoin jumped from $116,000 to $122,000, hinting at what can happen when volatility starts to expand. August is traditionally a period of low volumes and muted market activity, but rising IV suggests traders may be positioning for larger moves ahead.
Checkonchain data shows this latest rally was a spot-driven move, which is a healthier market structure than a purely leverage-fueled surge. Open interest has been declining through August, meaning a sudden influx of leverage could amplify price swings if sentiment shifts.
Read more: Bitcoin Bulls Take Another Shot at the Fibonacci Golden Ratio Above $122K as Inflation Data Looms
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