Wall Street’s Fear Gauge VIX Points to Local Bitcoin Bottom
The post Wall Street’s Fear Gauge VIX Points to Local Bitcoin Bottom appeared on BitcoinEthereumNews.com.
Wednesday, Dec. 18, will go down in history as a day of market panic triggered by the 25 basis point Fed rate cut and Chair Jerome Powell’s hawkish outlook. Bitcoin (BTC) briefly tumbled below $100,000; U.S. equities dropped around 3%, while the dollar index (DXY) index soared to a two-year high of 108, which continues to put pressure on currencies worldwide. The most significant movement came from the CBOE Volatility Index (VIX), which skyrocketed by 74%, marking the largest one-day jump in the Wall Street’s so-called fear gauge since Feb. 5, 2018. It was also the second-largest increase in its history. The VIX serves as a measure of market fear and expected volatility over the next 30 days. Historically, significant spikes in the VIX have marked local bottoms for both bitcoin and the S&P 500. Examining the top three one-day changes in the VIX, the first occurred on Feb. 5, 2018, when it surged by 116%. On that day, bitcoin plunged 16% to $6,891, which turned out to be a local bottom. By Feb. 20, prices had rebounded to over $11,000. The second-largest spike in the VIX occurred on Dec. 18, registering a 74% increase. The third biggest spike happened on Aug. 5, 2024, during the Yen carry trade unwind, when the VIX jumped 65%. On that occasion, bitcoin dropped 6% to hit a local bottom around $54,000 and climbed back up to over $64,000 by Aug. 23. A similar pattern has consistently played out in the S&P 500 over the years, data shared by Charlie Bilello, chief market strategist at Creative Planning, show. Let’s see if history repeats itself. At press time, BTC traded above $102,000 while the S&P 500 futures pointed to a positive open with a 0.37% gain. Charlie Bilello – VIX Source: https://www.coindesk.com/markets/2024/12/19/vixs-second-largest-spike-in-history-indicates-a-local-bottom-for-bitcoin-van-straten
