Jeff Park (Bitwise) warns that Bitcoin 's implied volatility is being compressed, falling from 63% at the end of November to 44% recently, making the prospect of a major price breakout unfavorable.
He stated that the current market structure is unfavorable because Bitcoin OGs continue to sell, while demand from ETFs and DATs has stalled. To break out of the current pattern, Bitcoin needs higher and sustained implied volatility, particularly in an upward direction.
- The volatility implies a decrease of 63% → 44% in two weeks.
- OG is selling off; demand for ETFs and DAT is slowing down.
- Increased volatility is needed, and it must be sustained to break the pattern.
Current situation
Bitcoin's implied volatility has decreased from its peak of 63% in late November to a recent 44%, after two weeks of consolidation. According to Jeff Park, the market structure is unfavorable due to selling by OGs and weakening demand from ETFs and DATs.
He said the suppression of volatility had dashed expectations of a major short-term price breakout. Earlier, at the end of November, volatility had increased, rekindling hope with the first unusual breakout signal, but it had quickly been suppressed again in the past two weeks.
The current market structure is fundamentally unfavorable for a substantial price increase in Bitcoin.
Conditions for breakthrough
Park emphasized that Bitcoin needs to return to a higher level of implied volatility, sustain it long enough, preferably with upward momentum, to break out of the current pattern.
In November, he announced the slogan "Volatility or death" and Chia the first unusual breakout signal. Although volatility then began to rise, it has now been completely compressed, from a high of 63% at the end of November to 44% as of December 14th.
Volatility or death
