Bitcoin Volatility Awakens as BVIV Breaks Trendline, Analysts Flag Key Drivers
12/11/2025
Bitcoin’s BTC $103,794 volatility, largely muted through 2025, is showing signs of resurgence, suggesting a period of increased price swings.
The Volmex 30-day implied volatility index (BVIV) recently broke above its year-to-date downtrend, a technical signal pointing to renewed turbulence. Analysts cite three main catalysts behind the shift:
Fewer Volatility Sellers
Institutional holders, miners, and long-term investors had been suppressing volatility via aggressive call option sales. After the October 10 selloff—when Bitcoin dropped from nearly $120,000 to $105,000—these participants pulled back, reducing downward pressure on implied volatility.
“Demand for downside protection has surged as traditional volatility sellers retreat, pushing IV higher,” said Jimmy Yang, co-founder of Orbit Markets.
Thin Liquidity Amplifies Moves
Liquidity has thinned since the crash, as market makers scaled back trading following steep losses. With fewer active quotes, large buy or sell orders now have a magnified impact on prices.
“Reduced institutional participation and lower risk limits are keeping the market sensitive to big trades,” noted Jeff Anderson, head of Asia at STS Digital.
Persistent Macro Risks
Ongoing U.S. fiscal uncertainty, tight liquidity, and inflation concerns are also contributing to elevated volatility. Griffin Ardern, head of BloFin Research and Options, emphasized that these systemic risks keep implied volatility high and sustained.
Outlook
With structural liquidity constraints, retreating volatility sellers, and lingering macro headwinds, Bitcoin is entering a phase of heightened turbulence. Traders can expect larger price swings and should plan risk strategies accordingly.
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