Volatility Surge

Definition ∞ A volatility surge signifies a rapid and substantial increase in the price fluctuations of a digital asset. This phenomenon indicates a period of heightened market uncertainty or significant trading activity, where asset prices experience large, unpredictable movements within a compressed timeframe. Such surges often correlate with major news announcements, macroeconomic shifts, or significant shifts in market sentiment. They represent a departure from typical price stability, presenting both opportunities and elevated risks for participants.
Context ∞ Crypto news frequently reports on volatility surges, especially around major regulatory announcements, technological updates, or large institutional trading movements. These periods of intensified price movement often prompt increased scrutiny from analysts and regulators. Understanding the drivers of volatility surges is essential for assessing market risk and forecasting potential future price action.