On April 7, the CBOE Volatility Index (VIX) achieved a rare spike at 60, a level that’s seen as a barometer for extreme market tang and uncertainty. According to Dan Tapiero, CEO of 10TFUND, the VIX has only reached five times 60 times prior to now 35 years, and data indicates a back rim of risk assets similar to Bitcoin (BTC) in 6 to 12 months.
CBOE Volatility Index. Source: CoinTelegraph/Tradingview
The VIX, which is mostly considered a “fear of fear”, reflects the expectations of investors of market turbulence based on the trade with S&P 500. As shown within the table, extreme spikes were observed in 2008 and 2020, which normally matched market messengers, where panic -driven sellers paved the way in which for generation market entries.
In view of this, Tapiero argued that the present spike is not any different, although the worst market fears are prone to be “evaluated” and the stage is ready for a positive future. Tapiero said “opportunities prefer a greater future”.
Julien Bittel, head of macro research at Global Macro Investor (GMI), also supported the claim of Tapiero and said that the tech shares have been probably the most overold since Covid-19 crashed. Over 55% of the Nasdaq 100 shares-shares shares shares of 14-day RSI under 30 years.
Bittel explained that after the VIX, 60 implied 60, the highest uncertainty implied, which breeded the fear within the minds of investors. Bittel briefly touched the US investors Intelligence Survey and compared the present bullish feeling of 23.6% with the bottom reading since December 2008.
In addition, 62% of the American Association of Individual Investors (AAII) are currently Bärisch, which has reflected the best bear reading since March 2009. Bittel said:
“In other words, we’re again on the identical fear that marks the bottom of the stock market after the worldwide financial crisis.”
In addition to a rare Vix spike, this widespread fear has market entries in assets similar to Bitcoin, for the reason that recovery of market liquidity will inevitably flow back into risk.
Analyst warns Bitcoin Vix trends are bearish
While macroeconomic experts have emphasized the opportunity of a bullish result for risk assets, analyst Tony Severino suggests that the Bitcoin/VIX ratio could also result in a bear market. In a recent X contribution, Severino predicted that Bitcoin had already reached this cycle at its cycle, but open to a possible change of opinion by the tip of April.
As shown within the table, Severino noticed a sales signal in early January. The analyst used the Elliott Wave Theory model to find out the present bear conditions, and said it was still early to say that Bitcoin was bullish based on the VIX correlation.
This article doesn’t contain investment advice or recommendations. Every investment and trade movement is the chance, and readers should perform their very own research results in the event that they make a choice.
