Bitcoin’s price volatility has climbed sharply over the past two months, raising the possibility that the market is shifting back toward options-driven price movements, according to Jeff Park, analyst and advisor at Bitwise.
Volatility Rising After ETF Era Calm
Following the approval of U.S. Bitcoin ETFs in early 2024, Bitcoin’s implied volatility remained subdued — never exceeding 80%, which is historically low for BTC.
But Park notes that volatility has steadily risen back to around 60%, hinting that the calm ETF era may be fading.
Charts shared by Park show that the highest volatility spikes occurred before ETF approvals, when options markets played a much larger role in Bitcoin’s price swings.
Why This Matters
Park recalls January 2021 as the last major options-driven melt-up. That period ignited the bull run that carried Bitcoin to $69,000 in November 2021.
He argues:
“It is options positioning, not just spot flows, that creates the decisive moves that carry Bitcoin to new highs.”
In other words, Bitcoin may be returning to a market structure where leveraged options positions, rather than steady ETF inflows, dictate major price moves.
Volatility Rising Across Global Markets
Binance CEO Richard Teng added that elevated volatility isn’t unique to Bitcoin — it is consistent with levels seen across broader financial markets.
This suggests the spike isn’t solely crypto-specific, but part of a wider risk-asset volatility cycle.
Crash Below $85K Triggers Sell-Off Fears
Bitcoin’s drop below $85,000 earlier this week triggered fears that the market may be entering a deeper correction. Analysts pointed to multiple contributing factors:
- Liquidation of highly leveraged derivatives positions
- Profit-taking by long-term holders
- Macroeconomic pressures affecting risk assets
This combination has intensified concerns about a sustained downturn.
Analysts Remain Long-Term Bullish
Despite short-term volatility, analysts at Bitfinex say the pullback reflects “tactical rebalancing”, not institutional exit. They maintain that Bitcoin’s long-term fundamentals, institutional adoption, and structural demand remain intact.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.