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Analysis of Recent VIX Spike and Its Impact on Bitcoin Outlook

Dan Tapiero and Julien Bittel suggest that the recent spike in the VIX to 60, signalling extreme market fear, may predict a bullish recovery for Bitcoin and other risk assets in 6 to 12 months, reflecting similar historical patterns. However, analyst Tony Severino warns of potential bearish trends for Bitcoin, citing sell signals and current market analysis.

On April 7, the CBOE Volatility Index (VIX) experienced a rare spike to 60, indicative of significant market fear. Dan Tapiero, CEO of 10Tfund, noted that this level has only occurred five times in the last 35 years, and historical data suggests a rebound may occur for risk assets such as Bitcoin (BTC) within 6 to 12 months.

The VIX serves as a “fear gauge,” reflecting investor expectations of market volatility based on S&P 500 options. Historical context reveals that severe spikes, previously noted in 2008 and 2020, generally align with market bottoms where panic selling provides opportunities for significant market entries. Tapiero suggests that with current fears likely priced in, future market conditions are more optimistic.

Supporting Tapiero, Julien Bittel, head of macro research at Global Macro Investor (GMI), pointed to an oversold condition in tech stocks. Over 55% of Nasdaq 100 stocks registered a 14-day RSI below 30, a signal typically seen during major financial crises, such as the 2008 collapse and the COVID-19 pandemic.

Bittel further commented on the sentiment reflected in the US Investors Intelligence Survey, noting a bullish sentiment of only 23.6%, the lowest since December 2008. Conversely, the American Association of Individual Investors (AAII) survey shows 62% of respondents are bearish, marking the highest bearish sentiment since March 2009. Bittel remarked on the parallels with prior market bottoms post-global financial crisis.

The combination of prevalent fear and the rare VIX spike indicates potential opportunities for market entries in cryptocurrencies like Bitcoin, as restored market liquidity typically returns to risk-on assets.

However, not all analysts share the bullish outlook. Tony Severino raised concerns regarding the Bitcoin/VIX ratio and suggested the potential for a bear market. He highlighted a sell signal in January and applied Elliott Wave theory to suggest the current bearish conditions may not favour a Bitcoin recovery yet.

This article is not intended as investment advice or recommendations, and readers are encouraged to conduct their own due diligence when making financial decisions.

Marcus Collins is a prominent investigative journalist who has spent the last 15 years uncovering corruption and social injustices. Raised in Atlanta, he attended Morehouse College, where he cultivated his passion for storytelling and advocacy. His work has appeared in leading publications and has led to significant policy changes. Known for his tenacity and deep ethical standards, Marcus continues to inspire upcoming journalists through workshops and mentorship programs across the country.

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