Volatility clusters: calm follows calm, violence follows violence. That persistence is one of the most robust regularities in any market, and it means a volatility reading is better understood as a state than as a point.
Direction of travel beats level
A mid-range reading arrived at from below — volatility rising out of a quiet stretch — is a different situation from the same reading arrived at from above, as a violent period decays.
The first tends to continue rising; the second tends to keep falling. Identical numbers, opposite expectations, and no single reading can distinguish them. That is why regime is a more useful frame than level, and why a cone read across horizons carries more than one figure does.
What the dealer map adds
Regime persistence has a mechanism attached to it in options markets. When dealers are long gamma their hedging dampens moves, which suppresses realised volatility, which keeps them long gamma. When they are short it works the other way and amplification feeds itself.
So the gamma regime is partly why volatility regimes persist, which is the argument in long gamma versus short gamma. The caveat for crypto is the one in crypto gamma is smaller than it looks: the mechanism is real and weaker than in an index, so it explains part of the persistence rather than most of it.
The leverage layer does the rest
What crypto has instead is a leverage feedback that equities largely lack. A move triggers liquidations, liquidations force flow in the same direction, and that flow extends the move — the mechanism in liquidation cascades, made worse when collateral is denominated in the asset falling.
So crypto volatility regimes are driven more by positioning and leverage than by dealer gamma, which is close to the reverse of the equity index case. Reading them with an equity model attached will attribute to gamma what is actually being done by margin.
The practical use
Size to the regime, not to the average. A position sized for a calm regime carried into a violent one is the single most common way a sound idea produces an unrecoverable loss.