BITCOIN and VIX. Buy/ Sell signals based on the Volatility Index

This two chart layout depicts Bitcoin (BTCUSD) at the top and the Volatility Index (VIX) at the bottom. A rather simple correlation analysis between the two assets. As you can immediately realize, VIX can give buy signals on BTC (green circles) when the price is High and sell signals (red circles) when it is low.

More specifically we see a clear Higher Lows trend-line and Resistance Zone on VIX. Since Bitcoin's November 2021 market High, every time VIX hit the Higher Lows trend-line, BTC started falling (some days variance), while every time it hit the Resistance Zone, BTC started rising (though rises are rather limited in strength during Bear Cycles). In total we've had 11 such signals since Nov 2021, and only one failed to deliver (May 02 2022).

Yesterday VIX gor rejected just below its Resistance Zone and posted a very strong red 1D candle. It remains to be seen if this very strong correlation will continue to hold and provide another excellent signal, at least on the short-term.

What do you think? Do you agree with this finding? Will the VIX rejection, indicating lower upcoming volatility, cause a rise on Bitcoin? Feel free to let me know in the comments section below!



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