Bitcoin volatility falls to a two-year low: Can it reach new highs after surpassing $109,000?

Gate market shows that Bitcoin made a strong pump in the early hours of today (July 3), continuously breaking through $108,000 and $109,000, currently reported at $108,949, with a 24-hour rise of 3.4%. Will this pump break new highs?

Bitcoin's Key Appeal Weakens: Volatility Plummets

According to Bloomberg, Bitcoin has remained in a narrow fluctuation range since the beginning of this year, and one of its key attractions since its early inception—high volatility—is weakening. According to the Deribit Bitcoin Volatility Index (DVOL), the closely watched measure of price volatility, "implied volatility," has fallen to its lowest level in about two years. This index tracks the annualized expectation of Bitcoin price fluctuations over the next 30 days.

"Bitcoin is becoming less speculative and more like a highly volatile macro asset," said Michael Longoria, a research analyst at crypto investment firm GSR (.

Opportunities for profit have decreased, traders face challenges Since its inception in 2009, traders have been attracted to Bitcoin, seeing it as a way to quickly profit through arbitrage and directional trading (trend trading). However, as volatility has decreased, many have found that Bitcoin profit opportunities are diminishing. So far in 2025, Bitcoin has risen about 17%, compared to more than doubling in each of the previous two years.

![])https://img.gateio.im/social/moments-87a9b3933a-297d2b5d5e-153d09-7649e1(

(Bitcoin implied volatility fell to a two-year low. Source: Deribit)

An increase in implied volatility usually indicates that market participants lack confidence in the direction of prices, and traders are typically willing to pay more to protect existing positions or bet on potential price rises or falls. A lower reading, on the other hand, suggests that market observers expect prices to stabilize.

Price range historically narrows, intraday volatility no longer In the past two months, the trading range of Bitcoin has been roughly between $93,000 and $111,000, which is one of the narrowest ranges in recent years. In the past, it was not uncommon to see price fluctuations of 5% or 10% in a single day, followed by a reversal on the next trading day.

Options Strategy Shift: Selling Call Options Becomes New Trend, Suppressing Volatility Some market observers attribute the price stability partly to the increase in call option selling volume. More and more holders are earning profits by selling call options on their held Bitcoin (covered call strategy). David Lawant, research director at FalconX, )David Lawant(, stated that this strategy helps to curb volatility by limiting price fluctuations around the option strike price.

"The composition of option players has changed," said Laont, "These are essentially covered call strategies that actually serve to reduce volatility. Because in comparison, about a year ago, typical option investors were more inclined to buy call options with the intention of gaining leveraged profits from the rise in Bitcoin prices."

Institutional Influence Increasing: Market Becoming More Rational, Price Discipline Strengthening The stability of Bitcoin coincides with the increasing influence of institutional investors, whether through corporate capital allocation strategies like those conducted by Michael Saylor's Strategy company or through the Bitcoin spot ETFs in the United States. Since their launch in January 2024, these ETFs have attracted approximately $54 billion in net inflows. Strategy currently holds Bitcoin valued at around $60 billion.

A recent report from Glassnode shows that while on-chain transaction volume has decreased, settlement value has increased, supporting the view that more high-net-worth participants (whales) are beginning to dominate this market, which was initially driven by individual investors.

"This shift helps to curb extreme market volatility and adds a layer of price discipline," summarized Longoria from GSR.