• Bitcoin has been positively correlated with the Wall Street index since March 2020. 
  • BTC is at risk of losing some of its recent gains as experts warn about a downside move in the S&P 500 ahead.
  • The Cboe Volatility Index surged 41% above its historical average, stirring an extreme uncertainty among stock investors.

Bitcoin appears to be at risk of losing a part of its recent gains as a stock market fear indicator dubbed “VIX” explodes above its historical average. VIX, the Cboe-based indicator, measures the S&P 500’s 30-day forward-looking volatility. Experts use this indicator to realize investors’ fears and risk tolerance. A higher VIX increases the probability of highly volatile moves, eventually leading to a period of panic selling.

Since March, the S&P 500 has surged constantly, assisted by major rallies in the share prices of Tesla and Amazon. At the same time, however, the S&P 500’s VIX has increased by 41% above its average at nearly 29, according to Cboe. This indicates potential shakeups in the stock market’s near future. 

Bitcoin traders, on the other hand, have been monitoring the S&P 500 to confirm their next directional bias. This is because of BTC’s increasing monthly correlation with the Wall Street index since March. Skew data reveals that the realized correlation hit a record high in July 2020. An increasing VIX reading further validates its command over the Bitcoin market with its long-term negative correlation with the leading cryptocurrency. 

Kristina Hooper, the chief global market strategist at Invesco, said that fears of an increased VIX reading also reflects in the bond markets. The yield on the US 10-year Treasury bond is close to a record low of 0.67, indicating an increased demand for safe-haven assets. Gold is also up by 18% on a year-to-date timeframe.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Bitcoin must reclaim $40,000 or risk plummeting to $20,000, curtailing crypto bull run

Cryptocurrencies in the market seem to be resuming their uptrends, following significant losses in the previous weeks. Uncertainty in the market was brought about by Bitcoin’s swings to $40,000 and back to $34,000.

More Bitcoin News

ADA technical and on-chain levels confirm a 60% explosion to $0.6

Cardano recently confirmed a breakout in away validating the 900% upswing prediction we discussed last week. Several hurdles have been shattered at the time of writing, including $0.3 and $0.35, adding credence to the potential breakout to $0.6.

More Cardano News

Yearn.Finance brushes shoulders with $40,000 overshadowing Bitcoin’s $36,000

Yearn.Finance has consistently recovered from the recent dip to $25,000. The price drop was not unique to the decentralized finance (DeFi) token but affected the entire cryptocurrency space. 

More Yearn.finance News

LINK squabbles under heavy selling pressure, downswing targets $16

Chainlink is up 10% in the last 24 hours and a whopping 52% in the previous seven days. After breaking above $20, LINK soared to a new record high at near $24. Meanwhile, the uptrend seems to have hit the ultimate point, as selling pressure finds its way back into the market.

More Chainlink News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: BTC price faces extreme volatility ahead of a new all-time high

Bitcoin had a wild run this week, dropping from a high of $41,350 to a low of 30,420 in less than 48 hours. 

Read the weekly forecast

BTC

ETH

XRP