VIX + Bitcoin = more of a risk on day than it appears - FS Insight
Merch Store

VIX + Bitcoin = more of a risk on day than it appears

May 19, 2021

STRATEGY: VIX barely surged... meh.  Bitcoin = leading indicator? >50% it bottomed
I am to share some unstructured market commentary today.  Today is one of the days where it is apparent that the linkage between Bitcoin + digital assets and financial markets increased significantly over the past year.  And given the wild moves today, I thought it appropriate to send out some post-closing thoughts (not in any particular order):

- VIX surged to nearly 26 today but ended the day basically flat
- VIX has little energy to surge higher and lower than the 28 last week
- If I "squint" I am seeing an H&S (head and shoulders) on the VIX
- If it manages to break the "neckline" ~17, VIX going to move to the low teens
- This would be very very risk-on

- Overnight, two things triggered panic- Reuters rehashed an old story of China ban (China ban) -- nothing new- concerns about BlockFi liquidity given erroneous rewards being sent (BlockFi story)- But this caused a healthy shakeout- Bitcoin narrative has splintered in 2021 given enormous wallet growth- many new to crypto are not drawn to "sound money"- lots of leverage offered by exchanges = liquidations of newbies- During the 2015-2017 Bitcoin rally, 9 declines of >20%, 5 declines >30%, so this is a normal course-...

Unlock this page with a FREE 30-Day Trial!

*Free trial available only on a monthly plan

If you are already a member at FS Insight, please Sign In If you don’t have a subscription to FS Insight yet, you can sign up below.

3/3
complimentary articles / month
FS Insight Guest PASS

Our FS Insight Guest PASS offers you 3 complimentary research reports every month.

You can unlock 2 more articles by joining our newsletter!

Looking to Take Your Investing
to the Next Level?

Reports you haven't read

After stalling yesterday, traditional equity indices have continued their march upwards, with the SPX (+0.86%) surpassing $4,200 and the NDQ (+1.01%) pushing past $14,400. Debt ceiling fears have largely been alleviated as a bill suspending the ceiling passed the House late last night and will now move on to a Senate vote. Crypto markets are not sharing the same optimism as BTC 0.98%  (-1.19%) has dropped back below $27k and ETH 1.63% ...

The crypto market has seen a significant reversal of its weekend rally as investors watchfully anticipate the House vote on the debt ceiling agreement brokered between the White House and the House Speaker. BTC 0.98%  has fallen below the $27k mark, while ETH 1.63%  grapples with maintaining a foothold above $1850, and other altcoins face more considerable downward pressure. Optimism (OP 1.79% ) has seen a roughly 4% decrease in value, hitting its lowest...