Market calm may be nearing its end. The Cboe Volatility Index (VIX), a widely followed measure of expected stock market swings, has dropped sharply in recent months, reaching a five-month low of 14.92 last week. But if historical trends hold, August could bring a sharp reversal in sentiment.
According to data from Barchart.com, August has been the VIX’s strongest month over the past 15 years, delivering an average gain of 13.68% and posting positive returns in 10 of those years. Notably, the index surged 135% during the same month in 2015.
This seasonal spike in the VIX — often called the “fear gauge” — tends to reflect increased risk aversion in equity markets. Because Bitcoin (BTC) has become increasingly correlated with risk assets like tech stocks, a surge in volatility on Wall Street could spill over into the crypto market.
Bitcoin is currently trading near $117,658. While its 30-day implied volatility indices have dropped sharply since November — breaking from a previously strong correlation with BTC price — the broader macro backdrop remains an influential force. A rise in the VIX typically coincides with equity weakness, and Bitcoin has shown a tendency to track those moves closely.
In recent months, crypto volatility has been subdued, but any sudden shifts in investor sentiment could quickly reignite price swings. The current setup — low volatility heading into a historically turbulent month — has analysts watching closely for a potential breakout in both traditional and digital assets.
If August lives up to its reputation, Bitcoin’s period of relative calm may be short-lived.
