The VIX is a hot topic across finance right now, as it has fallen to one of its lowest levels in years. In an unusual look at Bitcoin and its ratio against the VIX, the chart could indicate that the cryptocurrency market is on the cusp of a sharp rally…or a major rejection.
The cryptocurrency market is under SEC pressure and ready to explode
The price of bitcoin plummets, and cryptocurrencies collapse under the power of the US Securities and Exchange Commission. The Securities and Exchange Commission (SEC) has launched a series of enforcement actions against Binance and Coinbase, classifying many of the top cryptocurrencies as securities. The resulting panic and selling pressure has BTC struggling to maintain support.
However, if you switch from the regular BTCUSD chart to the BTCUSD vs VIX chart, the ratio between the two very different metrics tells a very different story than the USD chart.
The chart below shows that the BTCUSD/VIX ratio shows a strong correlation on the BTCUSD side. This makes sense with the low volatility index. In the past, a drop in the VIX and a rise in BTCUSD meant a major bull run.
The ratio looks ready for new highs | BTCUSD on TradingView.com
Why the VIX vs Bitcoin could mean a massive move down the road
The volatility indicator indicates volatility, not necessarily the direction in which volatility will take price. It rarely stays low for long. Elevated VIX levels are often associated with fear. Low levels of fear in the market, could eventually support the idea of increasing risky assets.
The ratio between BTCUSD and the VIX is also at an all-time high resistance, which it previously failed to hold as support. Bringing it back above the level could give the cryptocurrency market the boost it needs. The failure to push the resistance at this level could be a result of either a BTCUSD failure or a huge move higher in the VIX. What will happen?
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# Bitcoin Reverse #VIX Looks ready to explode 🚀
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– Tony “The Bull” (tonythebullBTC) June 9, 2023