Market Volatility Spurs Bitcoin Dip and S&P 500 Decline

Markets reacted negatively to the Fed's 25 basis point cut and hawkish outlook, causing bitcoin to tumble below $100,000 and U.S. equities to drop by 3%. The CBOE Volatility Index (VIX) jumped 74% on Wednesday, marking the biggest one-day jump since Feb. 5, 2018. Historical data suggests that significant spikes in the VIX are often followed by strong performance of bitcoin and the S&P 500.Bitcoin (BTC) briefly tumbled below $100,000; U.S.

equities dropped around 3%, while the dollar index (DXY) index soared to a two-year high of 108, which continues to put pressure on currencies worldwide. The most significant movement came from the CBOE Volatility Index (VIX), which skyrocketed by 74%, marking the largest one-day jump in Wall Street's so-called fear gauge since Feb. 5, 2018. It was also the second-largest increase in its history. The VIX serves as a measure of market fear and expected volatility over the next 30 days. Historically, significant spikes in the VIX have marked local bottoms for both bitcoin and the S&P 500. Examining the top three one-day changes in the VIX, the first occurred on Feb. 5, 2018, when it surged by 116%. On that day, bitcoin plunged 16% to $6,891, which turned out to be a local bottom. By Feb. 20, prices had rebounded to over $11,000.The third biggest spike happened on Aug. 5, 2024, during the Yen carry trade unwind, when the VIX jumped 65%. On that occasion, bitcoin dropped 6% to hit a local bottom around $54,000 and climbed back up to over $64,000 by Aug. 23.Let's see if history repeats itself. At press time, BTC traded above $102,000 while the S&P 500 futures pointed to a positive open with a 0.37% gain

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