Some care about bitcoin could still see a deeper selloff, but a key indicator suggests the bottom may already be behind us.
This indicator is the 30-day implied volatility, which is an option-based measure of expected price turbulence over four weeks.
The widely tracked 30-day implied volatility indices such as Deribit’s DVOL and Volmex’s BVIV surged 90% in early February as bitcoin crashed to nearly $60,000. Historically, similar spikes in volatility have coincided with peak panics and capitulations, marking price bottoms.
VIX-like opposite signal
Bitcoin’s market structure has increasingly mirrored Wall Street since the introduction of spot BTC ETFs in the US in early 2024.
In this context, implied volatility has emerged as a “fear gauge” and a contrarian indicator similar to the VIX, a real-time indicator that measures expected 30-day volatility of the S&P 500: It typically trends downward in stable markets, but rises sharply in moments of extreme fear that mark major market bottoms.
This dynamic was evident at the beginning of last month when bitcoin took off. The resulting panic demand for options, mostly puts, drove DVOL and BVIV skyward to 90% and above in a manner consistent with previous capitulation events, such as August 2024, when prices fell to near $50,000.
Same in November 2022 when FTX collapsed resulting in high fear sending implied volatility to 90%. At the time, bitcoin bottomed out below $20,000.
So if history is any guide, the bitcoin downtrend that began in October with highs above $126,000 has already ended.
Some might argue that an indicator doesn’t prove much, and that’s logical. But what makes it remarkable is its established role in traditional markets as a contrarian 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 represents peak market fear and “panic”.
In fact, many Wall Street strategies use the VIX as a “background indicator” to trigger systematic stock purchases. For example, quantitative mean reversion funds use models where a ViX that deviates significantly higher from its long-term average triggers an automated increase in equity leverage.
Speaking of the VIX, it hit a one-year high of 35% on March 9, nearly a month after the explosion in bitcoin volatility. The VIX has been elevated throughout 2026, but has remained below previous dislocation peaks above 60, seen during Liberation Day in April 2025.
