Realized Volatility (1Y)

Annualized standard deviation of daily log-returns over a trailing 365-day window — measures how volatile BTC price has been over the past year

Property	Value
Category	Market Data
Unit	Dimensionless
Resolution	1d
Assets	BTC
Tier	Basic
API Endpoint	GET /v1/prices
Field	realized_vol_1y

Overview

Realized Volatility (1Y) measures the actual historical price variability of Bitcoin over the trailing 365 days. Unlike implied volatility (which reflects market expectations), realized volatility is computed directly from observed daily price changes, making it a purely backward-looking metric.

The metric is annualized — a value of 0.50 (50%) means that, based on the past year's daily returns, the price has exhibited an annualized standard deviation of 50%.

Formula

$$\sigma_{1Y} = \sqrt{365} \times \sqrt{ \frac{1}{N-1} \sum_{i=1}^{N} \left( r_i - \bar{r} \right)^2 }$$

where:

• $r_i = \ln\left(\frac{P_i}{P_{i-1}}\right)$ — daily log-return
• $\bar{r}$ — mean of the $N$ log-returns in the window
• $N = 365$ — rolling window size
• The $\sqrt{365}$ factor annualizes the daily standard deviation

Interpretation

• High values (> 0.80): Extreme volatility regime — typically occurs during major crashes, capitulation events, or euphoric blow-off tops. The market is moving violently in one or both directions.
• Moderate values (0.40–0.80): Normal Bitcoin volatility. Bull markets with strong trending moves and healthy corrections live in this range.
• Low values (< 0.40): Compressed volatility — historically rare for Bitcoin and often precedes a major directional move (either up or down). These periods tend to mark accumulation or distribution phases.

Structural trend: Bitcoin's realized volatility has been gradually declining over successive market cycles as the asset matures, market depth increases, and a broader range of participants (including institutions) enter the market.

Use Cases

• Volatility compression detection: Periods of unusually low realized volatility often precede explosive moves. Monitoring this metric helps identify potential breakout setups.
• Risk management: Portfolio managers use realized volatility to size positions — higher volatility warrants smaller position sizes for equivalent risk exposure.
• Cycle phase identification: Blow-off tops and capitulation bottoms typically show the highest volatility readings, while mid-cycle accumulation shows compression.
• Options pricing context: Comparing realized volatility against implied volatility reveals whether options are cheap (IV < RV) or expensive (IV > RV), informing hedging and income strategies.

API Usage

curl -H "Authorization: Bearer YOUR_API_KEY" \
  "https://api.blocklens.co/v1/prices?start_date=2024-01-01&end_date=2024-12-31&limit=365"

Related Metrics

• Price — BTC market price
• Price Drawdown from ATH — Percentage decline of Bitcoin price from its all-time high — always 0% or negative, measuring how far price has fallen from its peak
• Volume — 24h trading volume
• Market Cap — Total market cap