Bitcoin's volatility spiked hard during Thursday's massive sell-off as traders rushed for downside protection. Despite the spike, bitcoin’s implied volatility remains far from extreme when viewed in historical context. A rising DVOL tells options markets expect larger price swings ahead, even if spot prices appear to stabilize. For now, options markets are signaling caution rather than panic. Still, paired with more than $1.7 billion in liquidations and heavy long positioning flushed out across exchanges, the volatility spike shows how fragile positioning had become.