This week has seen significant volatility, yet one particular indicator may be hinting at a long-term bullish outlook for Bitcoin.
The equity sell-off commenced on April 3, driven by uncertainties arising from President Donald Trump’s tariffs. Each subsequent day has witnessed dramatic fluctuations in both directions. Panic has permeated the equity and bond markets, causing gold to hit unprecedented all-time highs, while the DXY Index has fallen below 100 for the first time since July 2023.
In response, the S&P Volatility Index (VIX), frequently referred to as Wall Street’s “fear gauge,” has escalated to its highest point since last August. This is where Bitcoin’s situation becomes intriguing.
The Bitcoin to VIX ratio currently stands at 1,903, having touched a long-term trendline that previously aligned with market volatility amid the unwinding of the yen carry trade. At that time, Bitcoin had plummeted to around $49,000.
This marks the fourth occasion this ratio has reached the trendline and subsequently found a bottom. It previously touched the line in March 2020 during the peak of the COVID-19 crisis and again in August 2015, both instances followed by significant price rallies.
If this trendline maintains its role as reliable support, it may indicate that Bitcoin has once again discovered a long-term bottom.
Read more: Bitcoin’s Recent Drawdown Proves Its More Than Just a Leveraged Tech Play
