The short-term volatility of Bitcoin has recently dropped to levels not seen in years, sparking speculation about potential upcoming market movements.
According to data from Glassnode, the Bitcoin 1-week realized volatility has fallen to 23.42%, approaching historical lows. Over the past four years, the metric has dropped below this level only a few times.
Notably, this occurred in October 2024, when it slumped to 22.88%, and in November 2023, it bottomed at 21.35%. Historically, significant uptrends have followed such periods of compressed volatility.
How Bitcoin Reacted in Previous Instances
For context, in November 2023, when Bitcoin’s 1-week realized volatility touched a low of 21.35%, the premier asset was trading at $27K. By the end of January 2024, its price had appreciated by nearly 100%, reclaiming the $50K mark.
Similarly, in October 2024, Bitcoin was around $63K but has since improved by a similar magnitude, peaking at $110K in January 2025.
Now, with Bitcoin’s short-term volatility revisiting its historical bottom, analysts wonder if another major move is on the horizon. This comes at a time when Bitcoin’s performance has been relatively stagnant around the upper $90K region.
However, as of today, Bitcoin is making another bold attempt at the $100K level, reaching an intraday high of $99,500 at press time.
BTC Implied Volatility Also Falls to Multi-Year Lows
Meanwhile, the 1-week implied volatility (IV) for Bitcoin options has similarly dropped to 37.39%, according to Glassnode data. This current figure suggests that traders are not anticipating major short-term price swings.
It marks a significant dip from earlier levels. The last time IV was this low was in 2023 and early 2024. Also, notable volatility spikes followed.
Despite the short-term calm, longer-term implied volatility remains elevated. Specifically, Bitcoin’s 3-month IV stands at 53.1%, and the 6-month IV is at 56.25%.
These higher levels suggest that, while the market remains uneventful in the short term, traders are still bracing for larger swings in the medium and long term.
Similarly, #BTC’s 1-week options implied volatility has dropped to 37.39%, near multi-year lows. The last time IV was this low (2023, early 2024), major volatility spikes followed. Meanwhile, longer-term IV remains higher (3m: 53.1%, 6m: 56.25%): https://t.co/O2JVUItsBn pic.twitter.com/fcvhmJageW
— glassnode (@glassnode) February 21, 2025
Ultimately, the combination of low realized and implied volatility in the short-term and higher long-term implied volatility suggests a brewing storm. Bitcoin is hovering around $98,900 at press time, up 2% over the past day.