Year-End Bull Run Brewing for BTC and S&P 500, According to Volatility Data

Volatility indicators for Bitcoin (BTC) and the S&P 500 are retreating from recent spikes, signaling potential year-end bullish momentum.

Volmex’s 30-day Bitcoin implied volatility index (BVIV) dropped to 51% annualized after spiking to nearly 65% during the mid-November sell-off that pushed BTC from around $96,000 to $80,000. Similar patterns appear in Deribit’s DVOL, while the VIX, which tracks S&P 500 volatility, fell from 28% to 17%, showing a broad decline in market panic.

The drop in volatility suggests fear is subsiding and bulls are regaining control. Bitcoin has reclaimed over $91,000, displaying a negative correlation with its volatility index, a trend aligning BTC more closely with traditional assets.

The easing volatility corresponds with a surge in December Fed rate cut expectations, boosting risk appetite and reducing demand for BTC puts. Dr. Sean Dawson, head of research at Derive, told CoinDesk:

“Markets are stabilizing as rate-cut odds recover, with the probability of a 25 basis point cut jumping from 39% last week to nearly 87%.”

On Deribit and Derive, BTC call-put skews have eased to around -5% from -7%–10% last week, reflecting diminished fear and a partial unwind of defensive hedging. Dawson added, “Traders still pay for downside protection, but far less than last week as confidence returns.”