Bitcoin and silver are sending very different signals to markets at the end of the year, with volatility data showing traders actively revaluing one asset while leaving the other stuck in neutral.
Over the past month, Bitcoin’s 30-day annualized realized volatility has steadily compressed into the mid-40s, reflecting a market that remains range-bound and short on conviction. At 45%, the 30-day realized volatility is well below its 365-day average of 48%, according to TradingView data.
That may seem big compared to a blue-chip stock, but it’s nothing compared to silver, the semi-precious industrial metal.
Real silver volatility increased until the mid-1950s, driven by a strong rally, widening physical premia, and stress in global gold markets. Realized or historical volatility represents the actual fluctuations in the price of an asset over a specific period of time.
The volatility divergence is consistent with the price movement of the two assets. While silver is up over 151% this year, BTC is down almost 7%.
The massive spike in silver prices is due to the mismatch between supply and demand. While demand for solar panels, electric vehicles, electronics and battery technologies has increased sharply, supply has failed to keep pace.
Additionally, China decided to impose export licenses for silver starting January 1, tightening physical supply expectations, while prices in Shanghai and Dubai traded between $10 and $14 above the COMEX.
The London futures curve has slipped into sharp backwardation, a sign of immediate shortages, although futures markets are showing limited tension, analysts say.
Bitcoin, meanwhile, is trading nearly 30% below the record high of over $126,000 reached in October. Traders largely attribute the decline in demand for spot ETFs and the loss of momentum in the DAT narrative to the ongoing price slide alongside the October 10 crash that led to automatic deleveraging of winning bets, shaking investor confidence.
In a recent note, QCP Capital said that recent Bitcoin price action reflects mechanical forces rather than a change in sentiment. The firm wrote that reduced liquidity over the holidays amplified short-term moves, while last week’s large options expiration reset brokers’ positioning.
QCP added that around 50% of open positions were liquidated after expiration, leaving significant capital behind and reinforcing the lack of directional conviction.
Prediction markets reflect this division. On Polymarket, tied to late January silver price levels, investors are showing high confidence that prices will remain high, with limited confidence in a sharp collapse, but only modest probabilities attributed to near-term blowout highs.
The Bitcoin markets, for their part, mainly assess maintaining the current range. Traders assign a roughly 70% probability that Bitcoin will hold above $86,000 until early January, while the chances of a breakout above $92,000 fall below 25%.
