Analysts expect higher volatility as Bitcoin falls 8%

Bitfinex analysts are cautioning cryptocurrency traders to prepare for increased market volatility as Bitcoin (CRYPTO:BTC) experiences its first significant correction since reaching a record high.

Bitcoin recently dropped nearly 8% from its peak of $111,880, following a 50% rally over the previous 45 days, according to the latest Bitfinex Alpha report.

This marks the first notable pullback since April, when Bitcoin traded at $74,501.

The correction comes after a period of minimal retracements and coincides with a surge in Bitcoin derivatives activity.

Options open interest reached a record $49.4 billion before falling to $39 billion after the May options expiry, which analysts interpret as a sign that traders are preparing for larger price swings.

Perpetual futures open interest also approached all-time highs, contributing to a subsequent flush-out of leveraged positions.

Bitfinex analysts pointed to aggressive profit-taking as a key driver of the pullback.

“A useful gauge of this dynamic is the Relative Unrealised Profit metric, which measures the scale of paper profits across the network relative to market capitalisation,” the report states.

“At present, this indicator is breaking above its +2 standard deviation band—a region that has typically marked the onset of euphoric phases in prior cycles. These euphoric zones are often accompanied by elevated volatility and, crucially, tend to be short-lived. Statistically, only around 16 percent of all trading days in Bitcoin’s history have seen Relative Unrealised Profit reach such extremes,” the analysts added.

The correction also aligns with renewed macroeconomic pressures, including the reinstatement of U.S. tariffs and a rise in 30-year Treasury yields above 5% for the first time since 2009.

This tightening liquidity environment has affected both traditional and digital asset markets.

Industry developments during this period included Gamestop’s $513 million Bitcoin investment, the U.S. Labor Department’s reversal of guidance on crypto in 401(k) plans, and Russia’s central bank authorising crypto-linked instruments for qualified investors.

Despite the recent correction, Bitfinex analysts describe Bitcoin’s move as a “healthy reset” and believe the cryptocurrency remains structurally strong.

At the time of reporting, the Bitcoin (BTC) price was $105,390.