Bitcoin Silver and silver are sending contrasting signals to the market as the end of the year approaches, with volatility data showing traders aggressively repricing one asset while the other remains neutral.
Over the past month, Bitcoin’s annualized 30-day realized volatility has steadily compressed to around 40, reflecting that the market remains range-bound and lacks confidence. According to TradingView, the actual 30-day volatility is 45%, well below the 365-day average volatility of 48%.
That may seem big compared to blue chip stocks, but it’s nothing compared to the semi-precious industrial metal silver.
Silver’s realized volatility has surged into the mid-50s, driven by sharp gains, widening physical premiums, and pressure in global gold markets. Realized or historical volatility represents the actual price movement of an asset over a specific period of time.
The difference in volatility is consistent with the price performance of both assets. While silver is up more than 151% this year, Bitcoin is down nearly 7%.
The sharp rise in silver prices is caused by a mismatch between supply and demand. While demand for solar panels, electric vehicles, electronics and battery technology has risen sharply, supply has failed to keep pace.
Additionally, China’s decision to implement export licensing for silver from January 1 has tightened physical supply expectations, while prices in Shanghai and Dubai have been $10 to $14 higher than on the COMEX.
Analysts believe that despite limited pressure in the futures market, the London forward curve has fallen into sharp backwardation, a sign of immediate shortages.
Meanwhile, Bitcoin is trading nearly 30% below its all-time high of over $126,000 set in October. Traders generally blame the continued plunge in prices on waning demand for spot ETFs and the loss of momentum in the DAT narrative, as well as the October 10 crash that automatically deleveraged, eroding investor confidence.
QCP Capital said in a recent report that Bitcoin’s recent price action reflects mechanical forces rather than shifts in sentiment. The company wrote that holiday-reduced liquidity amplified short-term moves, while last week’s large options expiration reset traders’ positions.
QCP added that approximately 50% of open interest has declined post-expiration, leaving a large amount of capital on the sidelines and exacerbating the lack of directional conviction.
Prediction markets reflect this schism. On Polymarket, the peg to late January silver price levels shows a high degree of confidence in prices remaining high, with limited confidence in a major collapse, but a near-term top is unlikely.
Meanwhile, Bitcoin market prices have overwhelmingly continued within current ranges. Traders believe there is about a 70% chance of Bitcoin staying above $86,000 by early January, while the chance of breaking above $92,000 is less than 25%.