Bitcoin has established a floor with the high spike on the VIX indicator. I've been observing different indicators and looking for a correlation from the Stock Market to Bitcoin. The VIX indicator has been an interesting one to observe alongside Bitcoin's movements.
* The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market, derived from real-time, mid-quote prices of S&P 500 Index (SPX) call and put options. On a global basis, it is one of the most recognized measures of volatility -- widely reported by financial media and closely followed by a variety of market participants as a daily market indicator.
During the big drop in Bitcoin back in May, we had a huge spike in the VIX indicator, showing the first low of the new established bottom. In June, the VIX indicator had another spike but only to the VIX resistance line around 25.
We have a very similar look currently on Bitcoin. There was a spike above the VIX resistance line in December when Bitcoin dropped. I am waiting to see the second spike to the VIX resistance line and then another deep low on the main chart. This will likely extend down into the Support Zone from 42,000 - 45,500. This Support Zone was created using the Yearly VWAP as the top of the zone and the 2nd deviation on the Bollinger Bands as the bottom of the zone.
After this deeper dip into the Support Zone, Bitcoin will be ready to make make it's next leg up in this Bull Cycle and create a new All Time High, just like it did after the 2nd Dip in June. However, we know that nothing usually goes straight up in a line. We will likely see a little correction when it reaches the 2nd deviation at the top Bollinger Band and then on to the new All Time High.
It is possible that we don't dip into the Support Zone at all and we just take off from here as well. Either way, I see us going up from here.
* The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market, derived from real-time, mid-quote prices of S&P 500 Index (SPX) call and put options. On a global basis, it is one of the most recognized measures of volatility -- widely reported by financial media and closely followed by a variety of market participants as a daily market indicator.
During the big drop in Bitcoin back in May, we had a huge spike in the VIX indicator, showing the first low of the new established bottom. In June, the VIX indicator had another spike but only to the VIX resistance line around 25.
We have a very similar look currently on Bitcoin. There was a spike above the VIX resistance line in December when Bitcoin dropped. I am waiting to see the second spike to the VIX resistance line and then another deep low on the main chart. This will likely extend down into the Support Zone from 42,000 - 45,500. This Support Zone was created using the Yearly VWAP as the top of the zone and the 2nd deviation on the Bollinger Bands as the bottom of the zone.
After this deeper dip into the Support Zone, Bitcoin will be ready to make make it's next leg up in this Bull Cycle and create a new All Time High, just like it did after the 2nd Dip in June. However, we know that nothing usually goes straight up in a line. We will likely see a little correction when it reaches the 2nd deviation at the top Bollinger Band and then on to the new All Time High.
It is possible that we don't dip into the Support Zone at all and we just take off from here as well. Either way, I see us going up from here.
Comment:
Also meant to write "Re-Test" with the Second Lows. I need an editor, ha!
YIKES! Not in the "22" habit yet.