A key theme this month is not just that bitcoin $BTC$64,577.89 isn’t taking part in the risk-on rally exemplified by stocks, it’s how steady the cryptocurrency has been, to the point that 30-day implied volatility has dropped to a long-held floor of 36%.

More often than not, low volatility is taken as a sign of low risk. After all, if an asset isn’t swinging wildly, it must be safer, more predictable than one that is gyrating rapidly. In recent weeks, $BTC has looked far steadier than South Korea’s Kospi index, for example.

But that only tells us what is, not what could be. In other words, low volatility is no reason to let your guard down. When volatility is cheap, trading becomes cheap, encouraging punters to build large directional bets and hedging positions. That leaves the other side, the market makers, with a lot of exposure too.

If the market then starts moving, both sides end up doing more and more position management, adding to price swings. This explains why volatility is said to increase, or revert toward the mean, after a period of persistent decline.

“When volatility is cheap, traders can build directional positions and hedges at relatively low cost. If the market then moves through a level with concentrated positioning, dealer hedging can accelerate the move,” Adam Haeems, head of asset management at Tesseract Group, which manages $500 million in client assets, said in an email.

“The practical implication is that low volatility should not be mistaken for low risk. It is a reason to be careful with leverage, particularly when trading volumes and market depth are subdued.”

For now, $BTC remains choppy below $65,000 with some green shoots.

According to Paul Howard, a senior director at market-making firm Wincent, demand for puts, or downside protection, has weakened. At the same time, there is a lack of strong bids for upside exposure.

“It indicates that the bear market is close to trading at its lowest price range for this cycle, arguably over the coming weeks,” he said in an email.

“The asymmetry is not a bid for puts; it is the disappearance of the call bid. Nobody is paying for upside, and nobody is paying much for downside,” Glassnode said.

According to Howard, the next big catalyst would be “some positive regulatory news such as with the Clarity Act, which would likely manifest as institutional ETF inflows.”