Chart of the Week: Wall Street’s “Fear Indicator” Points to a Possible Bitcoin Bottom

Bitcoin’s VIX Ratio Suggests Possible Long-Term Bottom for BTC

In the midst of a volatile week, a key market indicator may be pointing toward a potential long-term bullish trend for Bitcoin.

The equity market sell-off began on April 3, triggered by the uncertainties surrounding President Donald Trump’s tariff policies. Since then, markets have experienced significant fluctuations, with panic hitting both equities and bond markets. Meanwhile, gold has reached new all-time highs, and the DXY Index dipped below 100 for the first time since July 2023.

Amid this turmoil, the S&P Volatility Index (VIX), also known as Wall Street’s “fear gauge,” has surged to levels not seen since August of last year. This is where things get interesting for Bitcoin.

The Bitcoin-to-VIX ratio has reached 1,903, touching a crucial long-term trendline that previously acted as support during periods of market volatility, such as the unwinding of the yen carry trade. At the time, Bitcoin had found a bottom around $49,000.

This marks the fourth time this ratio has tested this trendline, a pattern that historically has preceded price rallies. Similar trendline tests occurred in March 2020 during the peak of the COVID-19 crisis and in August 2015, both times followed by a rally in Bitcoin’s price.

If this trendline continues to serve as reliable support, it could indicate that Bitcoin has once again found its long-term bottom, setting the stage for a potential upward movement in the coming months.