ME News, July 20 (UTC+8), market analysts remind traders to closely watch Bitcoin’s potential “volatility storm” (Volmageddon) in the near term—an environment where volatility rapidly spikes. These events are often accompanied by price declines. The warning is mainly based on the trend of Bitcoin’s 30-day implied volatility index (BVIV). BVIV is often seen as the crypto market’s “fear index” (VIX), with its changes influenced by options demand. Options are derivatives investors use to hedge the risk of sharp market volatility; when demand is higher, implied volatility is typically higher, and vice versa. Currently, BVIV is hovering in the 34%-38% range. Historical data shows that this zone has often become a key location before volatility outbreaks, followed by Bitcoin price pullbacks. For example, at the end of May this year, BVIV entered a similar range; afterward, within less than a week, Bitcoin’s price fell from $74,000 to below $60,000, while BVIV rose noticeably. Similar moves also occurred in early February this year before the market crash, as well as during the adjustment phase after Bitcoin set a new all-time high in October last year. Although historical patterns cannot guarantee a repeat in the future, market consensus suggests volatility tends to mean-revert. Typically, after a low-volatility phase, volatility amplification is more likely to follow, while a high-volatility phase may gradually return to stability. BVIV is still below its 30-day and 200-day simple moving averages, indicating that current market volatility costs are relatively low and close to historical support zones. This may signal that volatility is about to rebound and the market could face a new round of range-bound trading. As of now, the Bitcoin price remains above $64,000 and has been consolidating sideways since last Wednesday. While some analysts note that Bitcoin spot ETFs have seen net inflows for two consecutive weeks, compared with the tens of billions of dollars that exited during the prior eight straight weeks of outflows, the inflow scale is still relatively limited. Traditional market volatility indicators are currently sending different signals. South Korea’s KOSPI VIX is currently above 70%, the highest level since the 1990s; the U.S. stock market’s fear index VIX rose by more than 12% last Friday, reaching about 18%, and has stayed around that level. However, these volatility levels have persisted for months, suggesting that the stock market has not yet shown any clear panic sentiment. (Source: ODAILY)

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Bitcoin Volatility Alert Triggered: BVIV Approaching Key Support Zone, Possible “Volatility Storm” Market Conditions

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