Bitcoin’s Calm Before the Storm? Derive’s Nick Forster Warns of Looming Volatility
Bitcoin (BTC) has been experiencing a period of relative stability, but this calm may not last long, as a surge in volatility could be on the horizon, according to insights from decentralized crypto options platform Derive.
Since March 12, BTC has been consolidating within the $80K-$85K range, a pattern typically observed following major price movements. The cryptocurrency previously plunged from $100K to below $80K due to several macroeconomic factors, including President Donald Trump’s tariff policies and disappointment over the U.S. strategic BTC reserve showing no signs of new acquisitions.
With this prolonged consolidation, key volatility indicators have hit multi-week lows. However, volatility is known to revert to the mean, suggesting that a significant price swing—either upward or downward—could be imminent, Derive analysts say.
“BTC’s weekly at-the-money (ATM) volatility has dropped to 49%, nearing its monthly low of 45%. Meanwhile, realized volatility has fallen from 91% at the start of March to just 54% today,” Derive founder Nick Forster noted in a report shared with CoinDesk.
Forster emphasized that volatility itself does not indicate price direction—only that large movements are likely. “Since volatility is mean-reverting, we anticipate a rise soon, likely back to February’s levels of 60-70%,” he added.
Derive analysts point to several catalysts that could fuel this volatility, including geopolitical developments such as a potential ceasefire (or continued conflict) in Ukraine, as well as regulatory shifts under the Trump administration that could impact the broader crypto market.
Another potential market mover is Wednesday’s Federal Reserve decision on interest rates. While the central bank is widely expected to keep rates steady, traders are currently pricing in two to three cuts later this year. A dovish surprise could ignite bullish momentum in risk assets, including BTC.
However, asset manager BlackRock warns that expectations for rate cuts may be overblown. “Markets have priced in two to three 25-basis-point rate cuts this year, but we believe inflationary pressures will likely limit how much the Fed can actually cut,” BlackRock analysts wrote in a weekly market update.
If equity markets continue to weaken, a spike in volatility could drive crypto prices lower, amplifying losses for BTC and other digital assets.
Derive, an AI-powered on-chain options protocol with nearly $100 million in total value locked and $15 billion in cumulative trading volume, remains focused on tracking these developments as traders brace for potential turbulence ahead.
