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:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

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 Report Templates (3).png

Research

Pear Protocol has proven its market fit through its pair-trading infrastructure, sustaining consistent trading activity despite recent headwinds. Its strategic pivot toward Hyperliquid integration represents a major growth catalyst amid industry consolidation. While short-term token unlocks present challenges, current valuations and liquidity conditions may offer compelling opportunities for investors.

article-image

For just $54, you, too, could send a memecoin 500% higher

article-image

Memecoins, tech, and inflation have dominated the first half of the year

article-image

As the Trump administration continues to test Fed independence, markets are beginning to react

article-image

An Aave interest rate shock prompted over 475,000 validators to exit and pushed stETH into a prolonged depeg

article-image

While Roman Storm’s team is set to present its case, it’s not yet clear if the Tornado Cash founder will testify

article-image

A wireless network inspired by lost drones is now helping telco carriers reach your phone indoors