Determining Bitcoin Bottoming Opportunities through VIX
VIX is a measure of panic in the U.S. and can be seen as free data on TradingView. It has been a bottoming strategy I have used for a long time. Through backtesting data, I found this method to be quite effective, especially during times of extreme market sentiment.
I categorize VIX bottoming into several stages:
1⃣. When VIX < 20, it is generally in a state of normal volatility.
2⃣. When VIX < 25, it has entered the early stages of panic. This may not necessarily be the best time to buy the dip, but it can be used as a point of observation, especially for assets that have declined significantly.
3⃣. VIX > 25 occurs relatively infrequently. This often coincides with event-driven situations, such as the two instances in October and November 2025—one was a government shutdown, and the other was related to tariffs. Events often lead to rebounds once they conclude. This stage can be considered for starting to build positions based on the situation.
4⃣. VIX > 30 is a situation that does not occur often and usually involves more extreme events, with a more pronounced fear effect on the market. This is often a time when the success rate of buying is higher.
5⃣. VIX > 40 indicates that the market has begun to spread bearish sentiments. When this occurs, it is advisable to increase investments. All my backtesting data shows that investing in $BTC in this range has very good stability, but situations exceeding 40 are still quite rare.
6⃣. VIX > 50 is a very rare occurrence. The last time this happened was in April 2025, during the U.S. adjustments, particularly related to the tariff war with China. Historical backtesting data shows that when VIX exceeds 50, there is often a significant upward trend within a short period.
The current VIX is 22.56, which falls into the observation zone. Whether to buy or not in this range is not a big issue and can be decided based on one's own situation. However, exceeding 25 or 30 is indeed a more prudent timing, though occurrences above 30 have been infrequent in the past two to three years.
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