Bitcoin (BTC) is logging more unusually large single-day price swings in 2026 than it did during the 2018 bear market, even as its overall volatility has fallen sharply — a combination that challenges anyone relying on standard risk models, according to a CoinDesk analysis.

The largest cryptocurrency, trading around $84,155.39, has recorded 10 days this year when its price moved at least three standard deviations — or "three sigma" — from its recent trading pattern. That is more than the eight such days recorded throughout all of 2018, when bitcoin lost 73% of its value.

The findings suggest bitcoin has calmed over the years but still produces outsized days — and this year it has produced them more often than in 2018. Annualized volatility is about 46%, down from 84% in 2018, while the average three-sigma move has shrunk to roughly 7% from about 10% eight years ago. In other words, the swings themselves are smaller, but they are occurring more frequently relative to bitcoin's recent behavior.

"Bitcoin still goes through long quiet stretches followed by sharp repricings, and that hasn't changed," said Nicolas Quatravaux, head of EMEA at Paradigm, the leading institutional liquidity network in crypto derivatives. "The market has matured, with more institutions, ETFs and much deeper liquidity, so the average day is calmer. But the shocks haven't gone away: macro, leverage, positioning."

The frequency of these extreme days matters well beyond crypto-native trading desks. With ETFs and institutional money now a fixture of the market, how bitcoin's risk is measured feeds directly into how portfolio allocations are sized — raising questions about whether volatility-based tools may understate bitcoin's tail risk and encourage overly large positions in an increasingly institutional crypto market.

How the 'sigma' days are measured

Traders use "sigma" to describe how far an asset's price deviates from its typical behavior. To quantify these moves, CoinDesk compared each day's price change with bitcoin's 30-day realized volatility, a measure of how much the price typically moves each day over the previous month. Any day that moved at least three times that amount, in either direction, counted as a "3-sigma" day.

Because that yardstick is backward-looking, a quiet stretch lowers the bar for what qualifies as an extreme day — one reason calm trading and frequent three-sigma readings can coexist.

Under a normal bell-shaped distribution, about 95% of moves fall within two sigma and 99.7% within three, making a three-sigma move rare — which is why traders use it to flag outsized swings. A high count indicates an asset remains prone to sudden jolts even as its overall volatility cools.

The contrast is noticeable even against other volatile assets. Since 2024, bitcoin has been about as volatile as Nvidia, at roughly 47%. Yet bitcoin has logged 26 three-sigma days in that span, compared with Nvidia's eight. The S&P 500 had 16, and gold had 12.

Why falling volatility can mislead risk models

The persistence of extreme moves poses a challenge for investors who use volatility-based models to determine how much bitcoin to hold.

One widely used metric is value-at-risk, or VaR, which estimates how much a portfolio could lose on a bad day. Some VaR models rely heavily on recent price fluctuations, meaning a prolonged stretch of calmer trading can make an asset appear less risky. Bitcoin's declining 30-, 90- and 180-day volatility measures could therefore encourage investors to raise their exposure. But depending on how the model is constructed, that apparent reduction in risk may not fully capture the possibility of unusually large losses.

VaR also estimates only a loss threshold; it does not tell investors how severe losses could become beyond that point. This gap is known as tail risk — the possibility of rare but unusually large losses that fall outside an asset's normal trading pattern. Bitcoin's recurring three-sigma moves illustrate why investors need to consider such extreme outcomes even as day-to-day volatility declines.

"Standard VaR measures do not properly assess the full tail risk, and this is one of the main reasons industry has been moving towards Expected Shortfall and similar measures, that do take tail risk into account," said Luuk Strijers, CEO of crypto options exchange Deribit.

Expected shortfall looks at how bad losses get on the worst days, not just how often they happen. Unlike VaR alone, this methodology helps investors gauge how damaging extreme losses could be. The shift is not unique to crypto: after the 2008 financial crisis, international banking standards for market risk also moved away from VaR toward expected-shortfall-based measures.

"If tail risk is not considered in the portfolio targets, then a quieter bitcoin does encourage indeed a broader allocation in the portfolio, making sudden jumps have a greater impact in the portfolio," Strijers said. He added that these 3-sigma risks can be hedged with bitcoin options.

Why the sudden swings keep coming

Market participants point to a volatile of unpredictable macroeconomic shocks and highly leveraged options positioning as the dual drivers of these high-VaR days.

Paradigm's Quatravaux said this year is a good example. "It was a slow start, with money rotating out into tech stocks, and a string of DeFi hacks pushed people towards vol selling and structured products for yield. Then you get Trump, the Iran war, the Fed, and with everyone short vol in a range, one headline is enough to give you an outsized day," he said.

Essentially, the risk builds when traders bet that prices will remain relatively stable. That positioning involves selling — or shorting — options, essentially insurance against big price swings, to pocket the premium. Such strategies work while markets stay quiet. But when a macro headline hits and prices suddenly lurch, the sellers are caught on the wrong side, and their rush to cover can turn a move into a shock.

Alexander S. Blume, co-founder and CEO of Two Prime, an SEC-Registered Investment Advisor, pointed to one especially popular version of that trade, called call overwriting. Investors sell call options on bitcoin they already own, giving up some of the upside in exchange for steady income from the premiums.

"I believe that, despite tempered volatility on the whole, the heavy increase in derivatives markets positioning allows for large moves to still occur somewhat frequently. At present, call overwriting is a highly crowded trade. When we see a move up, like the past month, it creates a short squeeze that amplifies the moves," Blume said.

A more resilient market?

The good news is that the market is absorbing these jolts better than it once did. On Sept. 21, the day of bitcoin's latest 3-sigma jump, Paradigm facilitated a record $6.7 billion in options trades.

"This time we haven't seen or heard of any desk taking a bad hit," Quatravaux said. "Participants are much more sophisticated than a few years ago, risk management has improved a lot, and there's more institutional money in the market, so a tough month stays a tough month."

Just don't expect these wild swings to stop.

"They'll stick around. Ten years of data shows these days haven't gone away as the market matured, because macro shocks aren't going anywhere," Quatravaux said.

For readers tracking the pattern, the gauges are the ones CoinDesk tracked here: the running count of three-sigma days set against bitcoin's 30-, 90- and 180-day volatility readings, and positioning across bitcoin's options market, where crowded short-volatility trades have repeatedly turned headlines into outsized moves.