The under is an excerpt from a latest version of the Deep Dive, Bitcoin Journal’s premium markets publication. To be among the many first to obtain these insights and different on-chain bitcoin market evaluation straight to your inbox, subscribe now.
This Daily Dive will touch on some of the recent macro trends and correlations in the BTC market. If you haven’t read this recent thread on the bitcoin market, check it out.
In Friday’s Daily Dive, with bitcoin below $40,000, we noted to keep an eye on the VIX, as risk assets continued to sell off in unison over the following month.
“If things continue to get ugly in equity markets, keep an eye on the VIX, which is a volatility index for the S&P 500. If stocks continue to drop, it will likely lead to continued weakness in bitcoin. The real question is what is the threshold where bitcoin derivatives markets face cascading liquidations, which is what worsened the sell-off in March of 2020.”
Just a mere three days later, U.S. markets opened down big and bitcoin was trading near $33,000 as volatility exploded, with the VIX touching as high as 38 before a massive reversal occurred:
As bitcoin matured as a worldwide macroeconomic asset, it elevated its correlation to equities and offered off throughout strikes increased within the VIX (threat off moments). Listed below are some highlighted moments over the past two years the place this has occurred:
We even have monitored the market’s expectations for the Federal Reserve Board by the Eurodollar futures market, a futures market on the anticipated Fed funds price. Expectations fell right now as fairness markets tanked, which was an implicit nod to the notorious “Fed put.”
