What is realized volatility?
Realized volatility (RV) is the standard deviation of an asset's actual price returns over a historical window — the observed variation, not a forecast.
For Bitcoin in calm markets, 30-day daily-granularity RV typically sits in the 30-50% annualized range. During major regime shifts (post-FTX collapse, ETF approval spikes, macro shocks), RV can spike to 100-150% on 7-day windows.
The relationship between realized volatility (what happened) and implied volatility (what options markets are pricing for the future) is the core signal in volatility-arbitrage trading. When IV is significantly higher than RV, vol is "expensive" — sellers can collect premium with positive expected value. When IV is much lower than RV, vol is "cheap" — long-gamma positions are favorable.
Why agents track RV
For trading agents, RV is a position-sizing input: the same dollar position in a 30%-RV asset has roughly half the dollar volatility of a 60%-RV asset. Agents that sized positions by notional alone (not vol-adjusted notional) take on hidden risk concentration.
For options strategies, the RV-vs-IV spread tells the agent whether to buy or sell vol. For market-regime detection, RV breakouts above a long-run trend often signal trend continuation; RV reverting toward trend signals consolidation.
Hive's analyze_coin tool returns RV across 7d/30d/90d windows alongside other risk metrics in a single MCP call. CoinGecko MCP returns price series — agents using it have to compute RV themselves.