Bitcoin (BTC) Volatility Bulls may soon get their wish because seasonal patterns in CBOE’s volatility index (VIX) suggest that Wall Street is ready for increased turbulence.
VIX measures the expected 30-day swings of the S&P 500 benchmark. According to Barchart.com, the historic pattern shows a frequent August wave that is often ahead of a fall in July.
August stands out like having the highest average monthly gain, 13.68%, over the past 15 years and rising for 10 of these years, including a monumental 135% increase in 2015.
The story repeats itself?
VIX fell in a third equal month in July and extended the slide from April heights. It hit a five -month low at 14.92 on Friday according to data source trading.
If the story is a guide, this decline is likely to set the scene for the August Bomb in volatility and risk aversion on Wall Street. VIX, who has been nicknamed the fear gauge, spides louder when stock prices fall and fall as they rise.
In other words, the expected volatility boom on Wall Street could be characterized by a stock market swing that could be wasted onto the Bitcoin market.
Bitcoin tends to trace the mood on Wall Street, especially in the technology stands, pretty close. BTC’s implied volatility index has developed a strong positive correlation with VIX, signaling a stable development to VIX-like fear gauges. Since November, BTC’s 30-day implicit volatility index has dropped sharply, ending the positive connection with the spot price.
Read: Bitcoin’s ‘Low Volatility’ Rally from $ 70k to $ 118K: A tale of transition from Wild West to Wall Street-like dynamics
