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

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

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 (8).png

Research

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

article-image

BTC finished the week up 1.6%, while L2s, RWAs and the treasury trade continued to grind lower

article-image

DTCC moves DTC-custodied Treasuries onchain via Canton, while Lighter’s LIT launches trading at a fees multiple in Hyperliquid territory

article-image

In the 90s, rapt audiences worldwide watched a coffee pot — will that fascination ever turn to crypto?

article-image

Some systems improve by failing — and crypto has no choice

article-image

Yield Basis introduces an IL-free AMM design that already dominates BTC DEX liquidity

article-image

Maybe tokenholders don’t need the rights that corporate shareholders have come to expect

Newsletter

The Breakdown

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

Blockworks Research

Unlock crypto's most powerful research platform.

Our research packs a punch and gives you actionable takeaways for each topic.

SubscribeGet in touch

Blockworks Inc.

133 W 19th St., New York, NY 10011

Blockworks Network

NewsPodcastsNewslettersEventsRoundtablesAnalytics