SKN | Is Bitcoin’s Volatility Vacation Over? Chart and Analysts Say Yes 3 Catalysts Behind the Shake-Up

3 Key Points:

• Bitcoin’s volatility index (BVIV) broke past trendline resistance, signaling the end of months of calm and the start of a high-turbulence phase.

• Analysts cite three key catalysts — a shift in market flows, thin liquidity, and macro uncertainty  as the drivers of renewed volatility.

• Major volatility sellers like whales and miners have stepped back, while institutional traders are buying downside protection amid rising risk.

By SKN News

Bitcoin’s long stretch of subdued price action appears to be ending.
After months of unusually tight trading ranges, the Volmex Bitcoin Volatility Index (BVIV)  a measure derived from options pricing  has surged past its yearlong downtrend, signaling a return of price turbulence and investor anxiety.

The breakout above trendline resistance, after declining from 73% annualized volatility earlier this year, suggests a sustained rise in implied volatility the market’s pricing of future price swings. Analysts say this marks the beginning of a new, more erratic chapter for Bitcoin.

Volatility Sellers Retreat: “The Dampers Are Off”

For most of 2025, Bitcoin’s volatility sellers  including longtime holders (“OGs”), miners, and whales  had successfully suppressed price swings through call overwriting strategies.

“Big whales and miners had been selling upside calls to generate yield, which mechanically pushed volatility lower,” said Jimmy Yang, co-founder of Orbit Markets.

That trend changed after the October 10 selloff, when Bitcoin plunged from nearly $120,000 to $105,000, and altcoins shed over 40% of their value.

Since then, those same players have backed away from volatility selling, leading to a supply crunch in the options market. Meanwhile, institutions have been buying downside protection, particularly puts below the $100,000 mark, driving volatility expectations higher.

“The combination of limited vol supply, increased downside hedging demand, and weaker liquidity suggests elevated volatility levels could persist in the near term,” Yang told CoinDesk.

Liquidity Dries Up And Price Swings Amplify

The October crash didn’t just shake investors  it also thinned market liquidity.
Liquidity, the ability to execute large trades without sharp price movements, has weakened significantly, leaving the market more prone to exaggerated swings.

Many market makers took heavy losses during the cascade of $20 billion in forced liquidations and have since curtailed trading activity, concerned about automatic deleveraging (ADL) systems.

With fewer liquidity providers quoting prices, Bitcoin’s price is now hypersensitive to large buy or sell orders.

“Since the Oct. 10 crash, institutional players have cut risk limits, reducing depth across exchanges,” said Jeff Anderson, head of Asia at STS Digital.

“Until sentiment and credit improve, option prices  and implied volatility  will remain elevated.”

However, Anderson noted that the “high-volatility regime” might prove temporary, unless broader financial market risk  such as the AI-driven equity bubble  unwinds.

Macro Turbulence Adds Fuel

Adding to the uncertainty are macro and political headwinds.
According to Griffin Ardern, head of research at BloFin, the U.S. government shutdown, tight fiat liquidity, and delayed economic data are clouding the Federal Reserve’s policy outlook, keeping volatility high across all risk assets.

“The pricing of macro and liquidity risks has led not only to higher implied volatility but also to persistent backwardation in volatility term structures since Oct. 12,” Ardern said.

He added that these are systemic risks, not isolated to Bitcoin. “The market is pricing in higher tail risks  and that’s unlikely to subside in the short term.”

Bottom Line: The Calm Has Likely Ended

With fewer volatility sellers, shallower liquidity, and unresolved macro tensions, analysts agree that Bitcoin’s era of subdued swings is likely over.

Volatility may now be structurally higher heading into the final stretch of 2025  especially if traders continue to hedge aggressively and market makers stay sidelined.

As Yang summed it up:

“Bitcoin’s volatility vacation is over. The market is awake again.”