Some are worried about bitcoin We could still see more selling, but one key indicator suggests the bottom may already be behind us.
This indicator is 30-day implied volatility, which is an options-based measure of expected four-week price turbulence.
Widely followed 30-day implied volatility indexes like Deribit’s DVOL and Volmex’s BVIV jumped to 90% in early February when Bitcoin crashed to near $60,000. Historically, similar spikes in volatility have coincided with peaks of panic and capitulation, marking price bottoms.
Contrary signal of VIX type
The structure of the Bitcoin market has increasingly mirrored that of Wall Street since the introduction of spot BTC ETFs in the United States in early 2024.
In this context, implied volatility has emerged as a “fear gauge” and contrarian indicator similar to the VIX, a real-time indicator measuring the 30-day expected volatility of the S&P 500: it generally tends downward in stable markets, but rises sharply during moments of extreme fear that mark major market lows.
This dynamic was evident early last month when Bitcoin crashed. The resulting panic demand for options, primarily puts, caused DVOL and BVIV to surge to 90% and above, in a manner consistent with previous capitulation events, such as in August 2024, when prices fell to a low near $50,000.
The same thing happened in November 2022, when FTX crashed, leading to a spike in fear, sending implied volatility to 90%. At that time, bitcoin had reached a level below $20,000.
So, if history is any guide, bitcoin’s downtrend that began in October at a high above $126,000 is already over.
Some may say that a single indicator doesn’t prove much, which makes sense. But what makes it notable is its established role in traditional markets as a contrarian indicator.
A very high VIX, well above its long-term average, is generally considered a strong contrarian buying signal for long-term investors because it represents a peak of fear and “panic” in the market.
In fact, many Wall Street strategies use the VIX as a “background indicator” to trigger systematic purchases of stocks. For example, quantitative mean reversion funds use models in which a ViX deviating significantly from its long-term average triggers an automated increase in leverage on stocks.
Speaking of the VIX, it hit a one-year high of 35% on March 9, almost a month after Bitcoin’s volatility exploded. The VIX was elevated throughout 2026, but remained below previous dislocation peaks above 60 seen on Liberation Day in April 2025.
