As Wall Street’s fear gauge jumped about 22% on Friday, Bitcoin stayed above $80,000 over the weekend, and moves during similar periods in the past suggest worries could ease before Monday’s open.
According to CoinDesk’s analysis, the VIX fell on the following Monday in most previous periods when it surged sharply on a Friday. Bitcoin holding its recent trading range while traditional markets were closed was another notable signal this weekend.
Fear Gauge’s Biggest Jump Since June
The VIX rose 21.5% to 19.99 on Friday, while the S&P 500 fell 1.09%. This was the VIX’s biggest daily increase since June 5. The index, calculated from options prices, measures the volatility investors expect in the S&P 500 over the next approximately four weeks.
Sell-offs in AI stocks and the cost of default insurance on these companies’ debt reaching record levels fueled concerns. Geopolitical developments also added to risk worries: Iran’s Islamic Revolutionary Guard Corps said Saturday that two oil tankers caught fire after hitting mines in the Strait of Hormuz.
Fear Eased on Mondays in 25 of 32 Cases
Since January 1990, excluding the latest move, there have been 32 cases in which the VIX rose at least 20% on a Friday. In 25 of them, the index fell the following Monday, while in seven the gains continued. The typical Monday move was a 4.5% decline.
The picture a month later was similar: the VIX was lower in 25 of the 32 cases, with a median decline of 16%. Seasonal data show that November saw declines in 25 of the past 36 years, with a median drop of 7.2%.
However, in periods such as August 2015, February 2018, and August 2024, sharp gains on Friday were followed by steep increases on Monday. So the easing that occurred most often in the past does not guarantee a calm start to this week.
Bitcoin Stayed Above $80,000
At the time the source article was published, Bitcoin remained above $80,000, holding within its recent volatile trading range. The Volmex BVIV Index, which measures Bitcoin’s expected volatility over the next 30 days, also fell 1% on Friday to just under 40% and showed no significant change over the weekend.
Bitcoin, which trades on weekends, is one of the assets investors watch to gauge global risk appetite before traditional markets open. This time, the fact that stock-market fear did not translate to the same extent into Bitcoin’s price and expected volatility supports the calmer outlook ahead of Monday.
Some Market Participants Expect More Volatility
In trades reported by CNBC, investors paid $1.7 million for 9,200 VIX call options expiring November 18 with a strike price of 20, and $1.1 million for 12,500 contracts with a strike price of 23. These trades indicate positions taken against a rise in volatility in the coming weeks.
Moreover, despite Friday’s jump, the VIX was still below 20. The index has exceeded 20 on more than a third of days since 1990. If fresh selling and rising concerns emerge on Monday, the fear gauge could climb further.
Not investment advice.