Bitcoin volatility ripped higher Thursday, marking the biggest jump since November as a sudden sell-off sent traders scrambling for downside protection. Deribit’s bitcoin volatility index (DVOL) climbed sharply from roughly 37 to above 44 — crypto’s closest analog to the VIX. DVOL measures the price action traders expect over the next 30 days based on options pricing; when it rises, options get pricier and market fear is rising. Thursday’s move shows traders were willing to pay up to hedge against bigger swings. Why this matters - Options basics: call options give the right to buy (a bullish bet); put options give the right to sell and are used to protect against price drops. Rising DVOL means demand for those protective puts is increasing. - Broader market stress: the VIX also rose, pointing to a broader risk-off move driven by renewed macro uncertainty — including elevated government shutdown risks and fresh political noise over future Federal Reserve leadership. - Liquidations and forced selling: exchanges saw more than $1.7 billion in liquidations as heavy long positioning was flushed out when prices broke lower, amplifying volatility. But it’s not yet extreme Even with the spike, bitcoin’s implied volatility isn’t at historical highs. Deribit shows an IV Rank of 36, meaning current implied volatility is only modestly above the lowest levels of the past year. IV Percentile sits near 50, indicating volatility has been lower about half the time over the past 12 months. In short: volatility jumped fast, but it isn’t stretched to extremes. What traders are doing Rising DVOL signals that options markets expect larger price swings ahead, even if spot prices stabilize. IV Rank and IV Percentile are key tools traders use to decide whether options are relatively cheap or expensive — which affects hedging, leverage and risk-management strategies. For now, the options market is signaling caution rather than outright panic. Outlook Derivatives markets are sending a clear message: bitcoin’s calm has ended. Traders are bracing for more turbulence, and some are eyeing a return toward the $70,000 level in the coming weeks as positioning adjusts. Read more AI-generated news on: undefined/news

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