Falling Bitcoin VIX confirming prices may have found their short-term bottom

Given the recent crypto market volatility, we are writing a bit more frequently to help ourselves and our readers better assess where the market may be headed. In our Sunday night note, we discussed how the market may be seeing an exhaustion of sellers. In our Monday night note, we discussed how that may have driven the market bounce we saw. On Tuesday and Wednesday (today), crypto markets have calmed down and more or less stabilized with Bitcoin now sitting around $39k.

Source: Bloomberg

The Bitcoin volatility index (VIX), which has surged over the past month from 75 to 160, has started to sharply fall since Monday, and now sits at 115. We view this as another bullish short-term indicator. We see further room for the BTC VIX to fall as a positive sign that could help move crypto markets higher as fear fades.

Source: T3 Index

Many investors right now are searching for the direction of prices over the medium term and are wondering – was the $65,000 price we saw in April the high for the year or is the crypto bull market still intact?

Source: Fundstrat, Bloomberg

We’ll say for now that – we see some indicators that are slightly less rosy than before but on balance they leave us on the bullish side over the balance of the year. More on this to come in later notes.