Bitcoin likely to face increased volatility, analysis suggests

Bitcoin is poised for a period of heightened volatility and uncertainty after a key options volatility index broke its recent downtrend, CoinDesk reports. The outlet noted that Volmex's 30-day BTC Implied Volatility Index (BVIV) has breached its downward trendline, signaling a greater likelihood of market instability in the short term. Jimmy Yang, co-founder of institutional crypto options liquidity provider Orbit Markets, explained the underlying dynamics. He said that early holders, miners, and large-scale investors had been suppressing volatility this year by consistently selling call options. However, as spot prices have continued to fall, these positions have been reduced, removing a key dampening factor. Yang added that this trend, combined with rising demand for downside put options, weakening liquidity, and macroeconomic uncertainty, makes increased short-term volatility for BTC highly probable.