A Bitcoin Storm Is Coming, According to Cryptocurrency Options Platform OnChain Derive
According to Nick Forster of Derive, BTC is currently showing low volatility, but a storm could be in store.
Author: Omkar Godbole | Edited by: Sam Reynolds Updated: Mar 18, 2025 7:54 AM UTC Published: Mar 18, 2025 7:46 AM UTC
What you should know:
- The current lull in the cryptocurrency market could be temporary and lead to significant price swings, according to Derive, a decentralized crypto options platform.
- Various factors could cause such volatility, including events in Ukraine, changes in cryptocurrency regulation under the Trump administration, and the Federal Reserve's interest rate decisions.
- Despite market expectations for two to three rate cuts this year, potential Federal Reserve rate cuts could be limited, reflecting concerns about a U.S. recession and continued inflation, according to BlackRock.
The calm that has returned to the Bitcoin (BTC) market may be short-lived and could potentially set the stage for a storm that could cause significant price swings, according to decentralized platform Derive.
Since March 12, BTC has stabilized in the $80K-$85K range in a consolidation that typically occurs after a significant directional move. Prices have fallen from $100K to under $80K in recent weeks for several reasons, including President Donald Trump’s tariffs and frustration over the lack of new purchases for the U.S. BTC strategic reserve.
With the latest consolidation, key volatility indicators have eased, approaching monthly lows. However, volatility is reverting to the mean, implying that the low volatility regime could soon lead to price swings, according to Derive.
“BTC weekly volatility in trading has fallen below 50% to 49%, approaching a monthly low of 45%. Realized volatility has also fallen from 91% at the start of the month to 54% today,” Nick Forster, founder of Derive, said in a recent note he shared with CoinDesk.
It is important to remember that volatility is independent of price, meaning that an expected increase in volatility does not indicate the direction of Bitcoin's price movement.
“Volatility is reverting to the mean, so we can expect it to increase soon, probably to levels seen in February (60-70%),” Forster added.
Whether prices rise or fall, volatility may increase, indicating the potential for significant price movements in either direction.
According to Derive, volatility could be caused by a variety of factors, including “a ceasefire (or lack thereof) in Ukraine or significant changes in cryptocurrency regulation under the Trump administration.”
Derive is the world's leading AI-powered options protocol with a total value locked of approximately $100 million. To date, the protocol has recorded a total trading volume of $15 billion.
The Federal Reserve's interest rate decision on Wednesday could also impact markets.
The central bank is likely to keep rates at current levels, while traders expect two or three rate cuts this year. But the unexpected
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