Despite the recent sharp fluctuations in the cryptocurrency market, some market indicators indicate that the harshest sales waves in Bitcoin may be behind us. Volatility indices, especially in the options market, provide similar examples in the past of a bottom being formed in the market when investors’ fear level was at its peak.
Fear Indicator in Volatility Indices
The rapid increase in the DVOL and BVIV indices at the beginning of February, which indicates the expected 30-day volatility of Bitcoin, attracted attention in the market. Volatility indicators, which jumped to the level of 90% during this period, accompanied Bitcoin’s decline to the level of $ 60,000.
Similar movements have been seen before. For example, in August 2024, while prices fell to approximately $50,000, volatility rose sharply. Similarly, during the collapse of the cryptocurrency exchange FTX in November 2022, the index tested the 90% level and Bitcoin fell below $ 20,000.
Similar to the VIX, which measures the volatility of the S&P 500 in the traditional finance world and is known as the “fear index”, such indicators in Bitcoin options give signs that downtrends have ended when the panic level in the market is at its peak.
Market Structure and Contrarian Indicators
Bitcoin began to show a stronger correlation with Wall Street following the launch of spot ETFs in the United States in January 2024. In this context, volatility indices also stand out as a kind of counter indicator in market pricing.
Volatility rising well above long-term averages has traditionally been seen as a long-term buying opportunity for large investors. On Wall Street, many algorithmic funds and quantitative strategies systematically use such peaks in the VIX index as a signal to buy stocks.
In line with the volatility seen in crypto markets last month, the VIX index reached its annual peak of 35% on March 9. While the VIX generally exhibited high volatility in 2026, the impact of similar market shocks was notable during the periods when it exceeded the 60 level in April 2025.
This increase in volatility in the markets affects the risk appetite and positioning of investors on both the crypto and traditional finance side. The sharp decline in Bitcoin in February and the accompanying explosion of volatility pointed to the formation of a new bottom among investors, compared to similar movements in the past.
