On Friday, Bitcoin’s price seemed ready to reach $100,000 after the United States Securities and Exchange Commission (SEC) decided to drop its lawsuit against the crypto exchange Coinbase. However, Bitcoin couldn’t keep up the momentum after a $1.4 billion hack on the ByBit exchange.
Now, with Bitcoin’s price just above $96,000, recent data shows that some volatility measures are close to hitting historically low levels. Here’s how this trend in volatility might affect Bitcoin’s price in the next few weeks.
Is a Bitcoin Price Surge Coming Soon?
In a recent post on X, crypto analytics company Glassnode discussed how two key volatility indicators, which are nearing historically low levels, could affect Bitcoin’s price and future direction. The two metrics are the 1-week “realized volatility” and “options implied volatility.”
To explain, realized volatility (also known as historical volatility) shows how much an asset’s price (in this case, BTC) has changed over a certain period. Implied volatility, however, measures the expected likelihood of future price changes.
Glassnode data reveals that Bitcoin’s 1-week realized volatility recently dropped to 23.42%. The firm pointed out that this level is near historical lows, as BTC’s realized volatility has only fallen below this number a few times in the last four years.
Notably, the 1-week realized volatility metric dropped to 22.88% and 21.35% in October 2024 and November 2024, respectively. These points have acted as bottoms, with the metric rebounding from this level in the past. From a historical perspective, such declines in realized volatility have preceded significant price movements, increasing the odds of a potential breakout – or even a correction.
At the same time, Bitcoin’s 1-week options implied volatility has dropped significantly to 37.39%. This level is close to the lowest points seen in the past few years, last occurring in 2023 and early 2024. Bitcoin’s price also saw big changes when the implied volatility was around this level.
On the other hand, longer-term implied volatility is showing a different trend. The 3-month implied volatility is about 53.1%, and the 6-month volatility is at 56.25%. This suggests that market participants expect more price movement in the next few months.
Bitcoin Price At A Glance
As of this writing, Bitcoin is valued at roughly $95,340, reflecting an over 3% decline in the past 24 hours.
