Bitcoin Price Will Be Less Volatile in Coming Weeks: Bitfinex

Bitcoin is in its “transitionary phase,” analysts say, marked by lower leverage, fewer short-term speculators — and less volatile price

article-image

Sergey Novikov/Shutterstock, modified by Blockworks

share

Bitcoin (BTC) might be less exciting when it comes to price action over the coming weeks, if the derivatives market is anything to go by.

Bitcoin options are flashing signs of decreasing volatility while sizable chunks of leverage have been pulled, according to Bitfinex analysts.

Abundant leverage in bitcoin derivatives markets was a major contributor to volatility over the past week, per a Monday research note. Now that the leverage is gone, we could be in for sideways trading moving forward.

Bitcoin is hovering around $28,000, down 5% over the past five days but practically even over the past month.

Granted, there has been substantial growth in open interest for bitcoin and ether derivatives this year. But open interest has been falling over the past three weeks, leading to the forced closure of both short and long positions, the analysts noted.

BTC options’ open interest has dropped from around $12.76 billion on Apr. 11 (three weeks ago) to current levels near $11.48 billion, CoinGlass data shows.

Bitcoin and ether have had an incredibly volatile year, fanned by the dramatic Terra collapse in May 2022

Bitcoin ‘tourists’ out, local price bottoms in

The “Estimated Leverage Ratio” measures leverage in the bitcoin market. The ratio dropped to a low of 0.195 last week — a reading not seen since Dec. 20, 2021. 

At the time, Bitcoin had just crashed 12% in a matter of days, from $56,500 to $49,500, which coincided with reduced leverage.

Implied volatility has also dipped to near historical lows set earlier this year, ranging between 48% and 55% for seven, 30, 90, and 180-day expiries. 

Implied volatility indicates how the market is estimating the future volatility of the underlying asset, in this case bitcoin. It’s based on the current price of options contracts.

Low implied volatility suggests a possible return to an era dominated by the spot market, similar to early 2023, Bitfinex said.

Estimated Leverage Ratio is trending downwards (source: CryptoQuant, Bitfinex)

Both metrics support the theory that bitcoin is in a “transitionary phase,” marked by a pause in price movement and decreased leverage alongside fewer short-term speculators.

“In transitionary phases for bitcoin historically, the elimination of speculators and bitcoin ‘tourists’ has been associated with the market forming a short-term low,” Bitfinex analysts said.

A rebound typically follows, according to Bitfinex, after which a fresh wave of investors and speculators enters the market, driven by price momentum and FOMO (fear of missing out).


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

Should higher-fidelity graphics be the goal for crypto games — which result in much higher costs and risk?

article-image

From Mel B to Neil deGrasse Tyson, BTC has seen its share of strange celebrity sightings

article-image

Circle’s roadshow will be the real test for the stablecoin issuer

article-image

PitchBook’s Robert Le said crypto projects focused on institutional use cases are the focus

article-image

The decentralized AI firm designed ODS to be owned by the community in an effort to promote more decentralized AI

article-image

The non-profit’s launch and big-name hires aim to grow Solana’s footprint in Washington