Bitcoin (BTC) has been trading in a tight range, but a major price shift may be on the horizon, according to Derive, an AI-powered on-chain options platform. With volatility metrics hitting monthly lows, analysts warn that the current calm could soon give way to sharp price swings.

Bitcoin’s Tight Trading Range

Since March 12, Bitcoin has been consolidating between $80K and $85K, following a sharp drop from $100K to under $80K. The downturn was triggered by factors including President Donald Trump’s tariffs and disappointment over the U.S. strategic BTC reserve failing to add new holdings.

As a result, volatility levels have plummeted, suggesting that a significant price move may be imminent.

Volatility Metrics Flashing a Warning

Volatility in the Bitcoin market tends to be mean-reverting, meaning periods of low volatility often precede major price swings. Derive’s founder, Nick Forster, highlighted key indicators:

• At-the-money (ATM) weekly volatility has dropped to 49%, nearing the monthly low of 45%.
• Realized volatility has fallen from 91% at the start of March to 54%.

“Volatility is likely to rise soon, probably reaching 60-70% levels seen in February,” Forster stated. However, it remains unclear whether the price movement will be bullish or bearish.

What Could Trigger the Next Bitcoin Storm?

According to Derive, multiple factors could disrupt the market:

• Geopolitical tensions: Developments in Ukraine could have a major impact on global risk assets, including BTC.
• Regulatory shifts: Changes in crypto policy under Trump’s administration could introduce fresh uncertainty.
• Federal Reserve policy: The upcoming Fed rate decision could influence market sentiment.

The Federal Reserve is expected to keep interest rates unchanged, but traders anticipate two to three rate cuts later this year. A dovish surprise could reignite bullish momentum, while prolonged uncertainty or persistent inflation might limit rate cuts—potentially pressuring BTC further.

A Market on the Edge

With volatility expected to rise, both bulls and bears must brace for sudden price swings. If equities continue to decline, Bitcoin could face renewed downward pressure. On the other hand, a favourable macro environment—such as a Fed pivot—could fuel a fresh rally.

For now, the market remains in a holding pattern, but according to Derive, the next big move could be just around the corner.