While past patterns are never a guarantee of future performance, volatility metrics are commonly known to be mean-reverting. This cyclical nature suggests that periods of below-average volatility are often followed by higher turbulence, while above-average volatility paves the way for market stability.
Currently, the index is trading below both its 30-day and 200-day simple moving averages. In essence, volatility is relatively “cheap” and sits in a historically reliable support zone, suggesting the measure may rise, signifying another round of turbulence.
For now, bitcoin continues to trade just above $64,000, maintaining the range-bound price action that has persisted since last Wednesday. While some analysts have noted two consecutive weeks of spot ETF inflows, the capital movement is small compared to the billions pulled from the market during the previous eight-week outflow streak.
Global volatility gauges in traditional markets are currently offering mixed signals. South Korea’s KOSPI VIX is currently above 70%, the highest level since the 1990s. Meanwhile, Wall Street’s VIX jumped over 12% to reach 18% on Friday, where it continues to soar. However, these levels have been in play for months, meaning stocks are anything but panicked.
In addition, the MOVE index, the 30-day volatility gauge for US Treasury backing global financials, remains steady around 70%, as it has done since April, providing a constructive signal about risk assets. Pay attention!
