Bitcoin Calm May Be the Eye of the Storm, Derive Warns of Looming Volatility

Bitcoin (BTC) has settled into a narrow trading range, but this period of stability might be deceptive, as major price swings could be on the horizon, according to Nick Forster, founder of the on-chain options platform Derive.

BTC has been consolidating between $80K and $85K since March 12, following a sharp decline from its $100K high earlier this year. Market turbulence was driven by factors such as President Donald Trump’s new tariff policies and disappointment over the U.S. government’s lack of additional bitcoin reserve purchases.

With price action flattening, bitcoin’s volatility metrics have plunged to multi-week lows. But Forster warns that this low-volatility phase is unlikely to last, as market conditions typically cycle back to more dramatic movements.

“Bitcoin’s weekly at-the-money (ATM) volatility has dropped below 50%, approaching its lowest levels in a month,” Forster said in a note shared with CoinDesk. “Realized volatility has fallen from 91% at the start of March to just 54% now, signaling a potential buildup for a significant move in either direction.”

Forster emphasized that increased volatility does not necessarily mean bitcoin’s price will surge—it simply means larger price fluctuations are expected. “Volatility is neutral in direction. It only tells us that the current calm won’t last for long,” he added.

According to Derive, key factors that could trigger a breakout include geopolitical developments such as the Ukraine conflict, as well as potential regulatory shifts under the Trump administration.

Traders are also closely watching the Federal Reserve’s interest rate decision on Wednesday. While markets are pricing in two to three rate cuts this year, a hawkish surprise could weigh on BTC, while a dovish stance might fuel a rally.

BlackRock analysts remain cautious about aggressive rate cuts, stating in a research note, “Markets are expecting multiple rate reductions, but persistent inflation concerns could limit the Fed’s flexibility.”

If broader financial markets continue to struggle, the anticipated volatility spike could amplify downside risks for bitcoin, adding further uncertainty to an already fragile market.

Derive, which has facilitated over $15 billion in trading volume and currently holds nearly $100 million in total value locked (TVL), is closely monitoring these developments as traders brace for bitcoin’s next major move.

---