Bitcoin Implied Volatility Reached a 2.5-Month High

Bitcoin’s implied volatility (IV) measure has surpassed the level of 42, reaching a 2.5-month peak in line with seasonal trends. The Bitcoin Implied Volatility Index, BVIV, provided by Volmex, represents the expected price fluctuation over a four-week annualized period, and it has recently hit its highest level since the end of August.

Implied volatility measures the market's expectations of future price fluctuations based on option pricing. A high IV indicates that investors expect significant price movements. The BVIV began to rise with the recent increase in Bitcoin prices, continuing to rise even after a drop from $126,000 to $120,000.

According to historical data, the second half of October typically represents one of the best return periods for Bitcoin. Based on data from Coinglass, Bitcoin has provided an average return of about %6 in the last two weeks, while historically November offers an average return of over %45. In the coming weeks, IV is expected to rise from its current level.

In recent years, Bitcoin’s IV has generally increased during price corrections. This downward IV trend that follows exhibits an inverse relationship with the overall price increase. As Bitcoin matures, it's expected that returns will decrease along with its volatility over time. However, the long-term trend indicated by the BVIV model shows a clear downward trend in this parameter.