Bitcoin’s volatility is continuing to contract, tracking a similar trend in the S&P 500, and reducing the likelihood of a year-end rally, analysts say.
BTC’s 30-day annualized implied volatility, measured by Volmex’s BVIV index, has fallen to 49%, reversing a spike from 46% to 65% over the 10 days through Nov. 21, according to TradingView. Implied volatility, derived from options pricing, reflects market expectations for price swings, and the decline points to a calmer near-term outlook for bitcoin.
The S&P 500’s VIX index has also dropped, falling from 28% on Nov. 20 to 17%.
Matrixport noted that the ongoing volatility compression lowers the probability of a meaningful year-end breakout. “With implied volatility continuing to compress, the likelihood of a significant upside into year-end is reduced,” the firm said Wednesday. “The FOMC meeting is the final major catalyst, but volatility is expected to drift lower afterward.”
Historically, bitcoin’s price has tended to rise alongside volatility, though this correlation has shifted toward negative since November 2024. On Wall Street, periods of compressed implied volatility often signal a potential bullish reset, highlighting the complex dynamics facing bitcoin as the year draws to a close.
