Bitcoin’s One analyst said the VIX is still falling, in line with the S&P 500, bringing price stability that weakens the case for a year-end rebound.
BTC’s annualized 30-day implied volatility, as measured by Volmex’s BVIV index, has fallen to 49%, nearly reversing its peak of 46% to 65% in the 10 days ending November 21, according to TradingView.
Implied volatility is an options-based measure that represents the market’s outlook for price movements over a specific period of time. The drop from 65% to 49% means that the expected price movement within 30 days has dropped from 5 percentage points to 14%.
The VIX index, which represents the 30-day implied volatility of the S&P 500, also fell, falling to 17% from 28% since November 20.
According to Matrixport, so-called volatility compression suggests a year-end rebound is unlikely.
“Implied volatility continues to compress, and with it the likelihood of a meaningful upside breakout by year-end,” the firm said in a market update on Wednesday. “Today’s FOMC meeting is the last major catalyst, but once it passes, volatility is likely to decline towards year-end.”
Matrixport’s view is consistent with Bitcoin’s historical positive relationship between price and volatility, although this relationship has gradually turned negative since November 2024.
On Wall Street, implied volatility compression is often associated with a bullish reset in market sentiment.