Bitcoin Market Turbulence May Be Ahead, Says Derive’s On-Chain Data Analysis

Bitcoin’s Stability May Be Deceptive as Derive Warns of Incoming Volatility

Bitcoin (BTC) has been trading in a relatively tight range, but this period of stability may not last long, according to Nick Forster, founder of decentralized on-chain options platform Derive.

BTC has been consolidating between $80K and $85K since March 12, following a steep drop from $100K in previous weeks. This decline was triggered by factors such as President Donald Trump’s tariff policies and the absence of new purchases for the U.S. strategic BTC reserve, disappointing market participants.

As a result of this consolidation, bitcoin’s volatility has hit multi-week lows. However, volatility tends to revert to the mean, and Forster warns that a major price movement—up or down—could be approaching.

“BTC’s weekly at-the-money (ATM) volatility has dropped to 49%, inching closer to the monthly low of 45%,” Forster explained in a report shared with CoinDesk. “Meanwhile, realized volatility has fallen from 91% at the beginning of March to 54% today, suggesting a buildup for a significant move.”

Forster cautioned that while volatility is set to return, it does not indicate the direction of bitcoin’s price movement. “Volatility doesn’t care about price trends—it simply means we should brace for bigger swings soon,” he added.

Derive analysts highlight key factors that could fuel this volatility, including geopolitical uncertainties such as the ongoing Ukraine conflict and potential regulatory shifts under the Trump administration.

Another major catalyst could be the Federal Reserve’s upcoming interest rate decision on Wednesday. While traders currently expect two to three rate cuts in 2025, a more aggressive stance from the Fed could fuel a rally, while continued economic uncertainty might push BTC lower.

Asset manager BlackRock remains skeptical about aggressive rate cuts, stating in a recent note, “Markets are anticipating two to three 25-basis-point rate cuts this year, but persistent inflation may limit how much the Fed can ease policy.”

If traditional markets continue to slide, the expected surge in volatility could lead to sharp declines for bitcoin and other cryptocurrencies, intensifying market uncertainty.

Derive, which has facilitated $15 billion in cumulative trading volume and holds nearly $100 million in total value locked (TVL), will be closely monitoring market conditions as traders prepare for what could be bitcoin’s next major move.