Bitcoin Volatility Spikes to 65% on FridayAfter almost a year of unusually calm trading, Bitcoin’s implied volatility finally woke up.
On Friday, the DVOL Index surged from ~35% to a peak of 65%, marking the sharpest move since early 2023.
Volatility has now cooled down to 43%, but these spikes rarely happen in isolation.
Historically, sharp increases in volatility often precede the formation of a major low or a new market top, a transition point where trends tend to shift.
Trade ideas
BTC Volatility at Lows: Next Expansion Will Reshape the CycleBTC Volatility Index is at a major support zone, where past cycle lows led to massive trend reversals and strong price expansions.
Every time BTC volatility reached this level (highlighted boxes), it was followed by a sharp move upward in both volatility and BTC price.
Currently, ETH and altcoins are leading, showing strong performance in the “catch-up” phase, but this typically precedes the main BTC-led move.
Next expected phase: A volatility spike (potentially in Q4) that sends BTC into a parabolic uptrend.
During this phase, alt/BTC pairs usually drop sharply (“nuke”) as capital rotates back to BTC.
After BTC’s explosive move, a true altseason begins as capital rotates back into alts.
Key signal: Watch for an expansion in BTC volatility from these historic lows as the “real fun” starts.
BTC volatility is at cycle lows, a zone that historically triggers major directional moves. Previous bounces from this area have coincided with powerful market expansions, first led by BTC, then followed by altcoins. While ETH and alts are currently showing strength, history suggests the cycle’s final stage begins with a BTC volatility spike—pushing BTC up rapidly, causing alt/BTC pairs to drop, and only then ushering in a real altseason. The next volatility expansion (likely Q4) could mark this transition.
DVOL simple explanationA bit about DVOL (source available from Deribit insights.deribit.com ). It deals with volatility of volatility and can be divided by 19, etc.
I'll try to explain it in simple terms. I conditionally split DVOL into two ranges: the "it’s going to blow" range and the "everything is calm" range. The "everything is calm" range is roughly 48-53 — this range indicates that the market has found some stability and is trading within a certain band. In this range, vertical spreads can be effective. They offer limited risk and can gradually accumulate the underlying asset.
However, when DVOL starts to leave this range, it signals that the market is about to experience significant moves. Importantly, it doesn’t matter if it breaks upward or downward — it would be a mistake to assume that a DVOL at 38, for example, indicates just a 2% price change with calm trading. On the contrary, it suggests that the coming trading sessions could be very active. Therefore, when DVOL moves beyond 55 or drops below 45, a strangle with a +/- 10 delta enters the scene (it’s important to understand time risk, i.e., when you plan to close it).
As you might notice, the same vertical spread can be transformed into a strangle with just two clicks when DVOL moves from 50 into the "it’s going to blow" territory. After that, it’s a matter of observation. I’d suggest that potential losses on the spread could exceed those of simply holding a strangle in such cases. Additionally, the strangle won’t limit your gains on the underlying asset in case of accelerated moves. The trick with a strangle, however, is that ideally, it should break out of its strike range before one-third of the time to expiration has passed.
How Volatility Effect Trading?Volatility can have a significant impact on trading. Lets say you're trading Bitcoin during a period of high volatility. The price may experience rapid and large fluctuations, which can present both opportunities and risks. Traders who can accurately predict and react to these price swings may be able to make substantial profits. On the other hand, if you're trading during a period of low volatility, the price may be relatively stable, making it harder to find profitable trading opportunities. It's important to consider volatility when formulating your trading strategies. Hope that helps :)
