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By James Van Straten|Edited by Parikshit Mishra
Aug 11, 2025, 10:04 a.m.
- DVOL index spikes to 37, up from last week’s 26% low, historically a precursor to sharp price swings.
- Spot-driven weekend rally from $116,000 to $122,000 suggests underlying strength as open interest trends lower.
Bitcoin’s (BTC) implied volatility (IV) has moved from 33 to 37 on Monday, a notable uptick from multi-year lows and a possible signal that the market’s long stretch of calm is nearing an end.
The Deribit Volatility Index (DVOL), modeled after the VIX in traditional markets, tracks the 30-day implied volatility of bitcoin options and now sits at its highest level in weeks.
STORY CONTINUES BELOW
Implied volatility represents the market’s forecast for price swings, calculated from option prices. In formal terms, IV measures the one-standard-deviation range of an asset’s expected movement over a year. Tracking at-the-money (ATM) IV offers a normalized view of sentiment, often rising and falling alongside realized volatility.
Last week, BTC’s short-term IV fell to around 26%, one of the lowest readings since options data began being recorded, before rebounding sharply. The last time volatility sat this low was August 2023, when bitcoin hovered near $30,000 shortly before a sharp move higher.
Over the weekend, bitcoin jumped from $116,000 to $122,000, hinting at what can happen when volatility starts to expand. August is traditionally a period of low volumes and muted market activity, but rising IV suggests traders may be positioning for larger moves ahead.
Checkonchain data shows this latest rally was a spot-driven move, which is a healthier market structure than a purely leverage-fueled surge. Open interest has been declining through August, meaning a sudden influx of leverage could amplify price swings if sentiment shifts.
Read more: Bitcoin Bulls Take Another Shot at the Fibonacci Golden Ratio Above $122K as Inflation Data Looms
James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin’s role within the broader financial system.
In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin and Strategy (MSTR).
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By James Van Straten, AI Boost|Edited by Sheldon Reback
2 hours ago
BTC nears record highs, but history suggests the $119,000 futures gap could invite a pullback.
What to know:
- CME bitcoin futures closed Friday at $117,430 and reopened Monday with a gap after the spot price hit $119,000 over the weekend.
- Traders warn that gaps are often filled, though strong momentum near all-time highs can create “runaway gaps” that remain open longer.
