Bitcoin Shows Signs of Potential Reversal as VIX Ratio Hits Key Support Level
As financial markets remain volatile, a unique technical signal may indicate that Bitcoin’s price could be near a significant bottom.
The sell-off in traditional equities began on April 3, fueled by heightened uncertainty from President Donald Trump’s tariff policies. Since then, market movements have been erratic, with volatility impacting stocks, bonds, and driving gold to new all-time highs. The DXY Index also slipped below 100 for the first time since mid-2023.
Amidst this market turbulence, the S&P Volatility Index (VIX), often referred to as the “fear gauge,” has spiked to its highest level since last August. However, for Bitcoin traders, there is a compelling indicator emerging from this backdrop.
The Bitcoin-to-VIX ratio has recently reached 1,903, touching a long-term trendline that has historically marked significant bottoms for Bitcoin. This trendline previously served as support during the unwinding of the yen carry trade, when Bitcoin bottomed out at around $49,000.
This is now the fourth time the Bitcoin-to-VIX ratio has met this trendline, with prior instances being in March 2020 during the peak of the COVID-19 market chaos and in August 2015. Both times were followed by notable rallies in Bitcoin’s price.
If this pattern holds, the ratio could suggest that Bitcoin is nearing another price bottom, with potential for a long-term bullish reversal in the coming weeks.
