BTC volatility signals a bottom as tradfi reels in uncertainty
The post BTC volatility signals a bottom as tradfi reels in uncertainty appeared on BitcoinEthereumNews.com.
Some worry bitcoin BTC$70,030.45 could still see a deeper sell-off, but one key indicator suggests the bottom may already be behind us. That indicator is the 30-day implied volatility, which is an options-based measure of expected price turbulence over four weeks. The widely-tracked 30-day implied volatility indices like Deribit’s DVOL and Volmex’s BVIV surged to 90% in early February when bitcoin crashed to almost $60,000. Historically, similar spikes in volatility have coincided with peak panic and capitulation, marking price bottoms. VIX-like contrary signal Bitcoin’s market structure has increasingly mirrored Wall Street since the introduction of spot BTC ETFs in the U.S. in early 2024. In this context, implied volatility has emerged as a “fear gauge” and a contrary indicator similar to the VIX, a real-time indicator measuring expected 30-day volatility of the S&P 500: It typically trends downward in stable markets but spikes sharply during moments of extreme fear that mark major market bottoms. This dynamic was on evident early last month when bitcoin tanked. The resulting panic demand for options, mostly puts, drove DVOL and BVIV skyward to 90% and above in a manner consistent with prior capitulation events, such as August 2024, when prices tanked to and bottomed near $50,000. The same thing in November 2022 when FTX collapsed, resulting in peak fear, sending implied volatility to 90%. At that time, bitcoin bottomed out below $20,000. So, if history is a guide, the bitcoin downtrend that began in October at highs above $126,000 has already ended. DVOL (TradingView) Some might argue that one indicator doesn’t prove much and that’s logical. But what makes it noteworthy is it’s established role in traditional markets as a contrary indicator. A super high VIX, well above its long-term average, is generally considered a strong contrarian buy signal for long-term investors, as it…
Filed under: News - @ March 24, 2026 8:27 pm