Bitcoin’s realized volatility surges in as traders face extreme price swings

Realized volatility measures how much an asset’s price fluctuated over a past period and is typically calculated by taking the standard deviation of daily (often log) returns and annualizing it. It differs from implied volatility, which reflects market expectations for future price swings.

Realized volatility is crucial because it captures actual market risk and helps investors gauge whether price movements align with their risk tolerance. It also reveals when markets are stressed, as large price swings drive up volatility.