Bitcoin’s implied volatility is climbing after hitting multi-year lows, signaling that the market’s extended period of calm may be coming to a close.
On Monday, the Deribit Volatility Index (DVOL) — which tracks 30-day implied volatility on Bitcoin options — rose from 33 to 37, reaching its highest level in weeks. The uptick follows a sharp rebound from last week’s low of 26%, a figure not seen since August 2023, when BTC was trading near $30,000 just before a major rally.
Implied volatility (IV) reflects market expectations for future price movement, calculated through options pricing. An increase in IV typically indicates growing uncertainty or anticipation of larger price swings.
Over the weekend, Bitcoin jumped from $116,000 to $122,000, reinforcing the idea that volatility is beginning to reawaken. Although August is often marked by lower volumes and subdued activity, the current volatility shift suggests traders are positioning for stronger market moves.
Data from Checkonchain indicates that this rally was led by spot buying, which is generally seen as a healthier foundation for price growth compared to leverage-fueled moves. Meanwhile, declining open interest in derivatives markets suggests that if leverage returns, any price swings could be amplified.
With Bitcoin hovering just below its all-time high of $123,000, the rise in implied volatility could be a sign that the next major move is imminent.
