• Advertise
  • Submit a Press Release
  • About Us
NewsBTC

Bitcoin & cryptocurrency news

  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
    • Research
    • Gambling
      • Crypto Casinos
      • Real Money Casinos
      • Casinos not on Gamstop
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Learn
    • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
    • Categories
  • Events
  • CasinosTry
  • Play GamesTry
  • Play Casino GamesTry
  • Best Crypto CasinoTry
No Result
View All Result
Breaking News: Ethereum Price Cracks Above $2,000 As BlackRock Eyes ETH ETF
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
    • Research
    • Gambling
      • Crypto Casinos
      • Real Money Casinos
      • Casinos not on Gamstop
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Learn
    • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
    • Categories
  • Events
  • CasinosTry
  • Play GamesTry
  • Play Casino GamesTry
  • Best Crypto CasinoTry
No Result
View All Result
Bitcoin News
No Result
View All Result
Breaking News: Ethereum Price Cracks Above $2,000 As BlackRock Eyes ETH ETF
bitcoin btc volatility vix index stock market

Is The VIX Volatility Index Forecasting A Major Bitcoin Crash?

Tony "The Bull" Severino by Tony "The Bull" Severino
3 years ago
in BTC
Reading Time: 3 mins read

Bitcoin price is consolidating just below $20,000. As the last confrontation with $10,000 has shown, consolidation below resistance is typically a bullish event. However, with such strong resistance above, the uncertainty surrounding the pandemic, the coming vaccine, and the change of power happening in the United States, there’s a recipe for rejection as well.

And while signals are mixed and analysts are divided, the VIX volatility index could be warning of an extremely volatile drop to come.

The Bearish Case: VIX Volatility In The Past Triggers Crypto’s Biggest Crashes

The cryptocurrency market is confused currently. After chaotic capitulation on Black Thursday, Bitcoin has done the unthinkable and risen from under $4,000 to nearly $20,000 in a year underscored by uncertainty, fear, and a pandemic, unlike the modern world has ever witnessed.

The world first learning of what was to come in March 2020, triggered the Black Thursday panic selloff that cut the leading cryptocurrency by market cap down by over 60% in days.

Related Reading | “Cyclical Nature Of Bitcoin” Could Provide Clues On Continuation Or Correction

The burst of volatility – measured by the VIX – is the largest in the asset’s young history. Bitcoin was born during The Great Recession, and the VIX hasn’t had anywhere near as sharp a spike as then, until 2020.

bitcoin vix

The VIX rose above a reading of 20 during most Bitcoin crashes historically | Source: BTCUSD on TradingView.com

The Volatility Index on Black Thursday spike to above a reading of 20, and has remained there since. The metric touched down on the key level, before beginning to turn back up – potentially signaling volatility ahead.

And this could be a bad sign with Bitcoin trading below its most powerful resistance yet of $20,000. According to the chart above, most instances of the VIX rising beyond a reading of 20 has led to a sharp selloff in crypto. While the market is at extreme exuberance, could this happen again?

The Bullish Case: Bitcoin Historic Volatility Begins To Grow, Could Resolve to The Upside

Volatility is defined by Investopedia as a representation “of how large an asset’s prices swing around the mean price,” adding that it is a “statistical measure of its dispersion of returns.”

As the definition explains, volatility can move in either direction and doesn’t necessarily mean a drop. Bitcoin is considered one of the most volatile assets in history, yet even though it is testing $20,000, certain tools show volatility is extremely low.

The resolution of low volatility phases often results in periods of heightened volatility. This is measured by several technical indicators and is expressed in how tightly coiled or how wide the Bollinger Bands are. Bollinger Band Width is a separate tool focused on only this.

bitcoin low volatility vix bollinger band width

Several volatility measuring tools show Bitcoin as historic lows | Source: BTCUSD on TradingView.com

According to the tool and historical volatility, Bitcoin’s bull run hasn’t even really started yet in terms of the volatility it will soon bring.

Related Reading | Bitcoin Intraday Volatility Explodes, But Historically Is Only Just Getting Started

Looking at past cycles and related measurements on each tool definitely demonstrates how little volatility is there currently by comparison. The largest increases in volatility in Bitcoin has always led to bull markets on the grandest scales. The VIX and the pandemic are unusual factors that weren’t applicable to past cycles, so anything is possible.

And while the signals are mixed and analysts are indeed divided, there is a chance they are both right – Bitcoin is going to go down and up – many, many times from here on out – until the asset has topped and it all starts over again.

Featured image from Deposit Photos, Charts from TradingView.com
Tags: bitcoinbtcbtcusdBTCUSDTcryptoxbtxbtusd
Tweet123Share196ShareSend
Tony "The Bull" Severino

Tony "The Bull" Severino

Tony "The Bull" Severino is a level 3 CMT student (passed level 1 & 2), technical analyst, and the Head of Research at NewsBTC. Tony is also the Founder of CoinChartist.io – a technical analysis educational resource designed for crypto traders. Tony is a partner of Elliott Wave International, TradingView, and a member of the CMT Association.

Related Posts

Bitcoin

Bitcoin Price Extends Rally Above $42K But Signs of Trend Exhaustion Appear

6 mins ago
Bitcoin

Bitcoin Price Surges Over 5% To Clear $40k, Why BTC Bulls Are Not Done Yet

24 hours ago
Bitcoin

Bitcoin Price Sprint to $40,000 – Can It Happen Soon Before EOY?

4 days ago
Bitcoin

Bitcoin Price Consolidates – Why 100 SMA Could Spark Fresh Increase

5 days ago
Bitcoin

Bitcoin Price Avoids Collapse But Can Bulls Clear This Major Hurdle?

6 days ago
Bitcoin

Bitcoin Price Grinds Lower As Risk of Drop To $35K Escalates

7 days ago

Premium Partners

Top Casinos

BitStarz

BitStarz

Review · Visit
Punt Casino

Punt Casino

Review · Visit
Trust Dice

Trust Dice

Review · Visit
mBit

mBit

Review · Visit
Inmerion

Inmerion

Review · Visit

Press Releases

  • BC.GAME Honored with the “Best Casino Operator 2023”...

    9 hours ago
  • Bitcoin, Ethereum, Dogecoin Surge on Fed Remarks; Analysts...

    12 hours ago
  • Sui Prepares for Token Unlocks, Bearish Indicator? Dogecoin...

    14 hours ago
  • New Digital Wallet Tezro Aims to Revolutionize Banking

    18 hours ago
  • NEO ZENTECH Emerges: My NEO Group Announces Major...

    18 hours ago

About Us

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

Company

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

© 2023 NewsBTC. All Rights Reserved.

  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
    • Research
    • Gambling
      • Crypto Casinos
      • Real Money Casinos
      • Casinos not on Gamstop
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Learn
    • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
    • Categories
  • Events
  • Casinos
  • Play Games
  • Play Casino Games
  • Best Crypto Casino

© 2023 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.