• Bitfinex’s Alpha report revealed that crypto traders are bracing themselves for “choppy waters” ahead due to bitcoin’s sudden plunge after a languid period.
• The report showed a surge and flatline in implied and historical volatility metrics, suggesting that traders have adjusted their strategies in preparation for impending volatility over the next month at least.
• Last week, bitcoin’s sudden plunge triggered $1 billion in futures liquidations with roughly $3 billion in open interest being wiped out within a few hours of the crash.

Bitcoin Plunge Could Lead to ‘Choppy Waters’ Ahead

Bitfinex’s Alpha report has suggested that cryptocurrency traders are bracing themselves for choppy waters ahead due to Bitcoin’s unexpected plunge after a relatively stable period of trading. On-chain data analyzed by researchers at crypto exchange Bitfinex showed a sharp increase followed by a flatline of both implied and historical volatility metrics, signalling that participants may be expecting more wild price swings within the coming month.

$1 Billion In Futures Liquidations After Sudden Plunge

When Bitcoin plummeted towards the $25,000 mark last week, it came as no surprise when markets reacted with over $1 billion in futures liquidations. Prior to this sudden dip, BTC had experienced an almost peaceful period as market participants sought out catalysts which could trigger sharp movements within the asset class. This was evident through Bitcoin’s open interest indicator which recorded significant spikes leading up to the crash.

Largest Open Interest Wipeout In History

The drop was followed by one of largest open interest wipeouts in history – approximately $3 billion worth was obliterated within only hours after the fall occurred. According to Bitfinex, this marked one of the largest reductions in day-to-day open interest since December 2021 when BTC hit its all-time high of nearly $69K – leaving many people wondering what will happen next?

Traders Adjusting Strategies To Brace For Volatility

As traders attempt to brace for any forthcoming unexpected movements, on-chain data suggests that they have been adjusting their strategies accordingly in order to prepare for potential volatility over the coming weeks/months. Whether or not these strategies will be effective is yet to be seen however it is clear that there is still much uncertainty surrounding what will happen next with Bitcoin & other cryptocurrencies due to their highly volatile nature & unpredictable market behaviour!


The crypto community is yet unsure what direction prices will move next however it appears that traders are starting take cautionary measures against any further surprises following Bitcoin’s recent collapse. With on-chain data indicating spikes & plummeting levels of implied & historical volatilities – it seems we could be heading into choppy waters indeed!