Bitcoin struggled to regain upward momentum Tuesday, even as a key measure of investor fear receded from its early-February peak, suggesting a stabilization in the volatile cryptocurrency market. The price of Bitcoin (BTC) traded just under $68,000 at press time, a 1.2% decline over the past 24 hours, according to CoinDesk data.
Bitcoin’s 30-day implied volatility, often described as a “panic gauge” reflecting expectations for price swings over the next four weeks, has fallen to an annualized 52%, according to data from Volmex. This decline reverses an earlier spike that saw the index climb from roughly 48% to nearly 100% as Bitcoin’s price briefly dipped to nearly $60,000 in early February.
The easing of volatility suggests that the intense panic buying of options and hedging instruments seen during the recent price drop has subsided. Options are derivative contracts that allow investors to protect against, or profit from, price fluctuations. Demand for these contracts directly influences implied volatility.
“Implied volatility has dropped, and deleveraging is running out of steam,” analysts at Bitfinex said in a statement. The analysts noted the newfound stability in the market.
Despite the easing of volatility, Bitcoin’s price remains under pressure. The sell-off earlier this month stalled near $60,000 on February 6, prompting a modest recovery, but prices have yet to sustainably break above $70,000. Analysts at Bitfinex suggest this indicates weak demand.
“Funding rates have yet to show appetite for aggressive re-leveraging and derivatives markets support the view of a stabilization rather than renewed buying,” the Bitfinex analysts explained. Perpetual funding rates, periodic payments exchanged between traders in crypto futures contracts, remain just above zero, indicating a mild bullish sentiment but not a strong surge in buying pressure.
Institutional investment has too been tepid. U.S.-listed spot Bitcoin exchange-traded funds (ETFs) have experienced a net outflow of $677.98 million this month, extending a three-month streak of redemptions, according to data from SoSoValue.
However, some factors offer potential support for Bitcoin. Declining U.S. Inflation and lower real yields could provide a tailwind for risk assets, including Bitcoin. Recent data showed the consumer price index (CPI) slowed to 2.4% year-on-year in January, from 2.7% in December, bolstering expectations for potential interest rate cuts by the Federal Reserve this year.
The real yield on the U.S. 10-year Treasury note fell to 1.8%, the lowest level since December 1. A decline in real yields often encourages investors to increase their allocation to non-yielding assets like Bitcoin. “Lower real yields reduce the relative carry disadvantage of non-yielding assets such as Bitcoin, while a softer dollar supports global liquidity conditions,” the Bitfinex analysts noted.
Polymarket has launched new prediction markets tied to Volmex’s bitcoin and ether 30-day implied volatility indices, allowing traders to bet on how high volatility will get in 2026. The contracts settle on Volmex’s 1-minute index highs, according to Polymarket.
