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Black Monday: Crypto Volatility Index soars


Coronavirus continues to generate fear in financial markets. Today, the crypto volatility index rose to historic levels. Starting at dawn on Monday with the fastest percentage drop in the price of oil, since the Persian Gulf War in 1991.

As a reference, the reference price of US oil plummeted to USD 27, which meant a drop of more than 25% only at the opening of the market.

Meanwhile, the world’s main bags sank loudly. The fall of 7% of the Dow Jones and S&P 500 only at the opening, led to them being paralyzed for 15 minutes, as an emergency measure, avoiding the increase in the stampede of short orders.

Bitcoin on the other hand has followed this negative current, reaching USD 7,650 a few hours ago, after having been last March 7 at USD 9,200, which has meant a drop of more than 15%.

How has the Crypto Volatility Index behaved?

There is no doubt that high volatility is reigning in the markets, so it is relevant that we make a Behavior analysis of the Crypto Volatility Index, made by Bita, and operable in Plus500.

Its current score is 118.47, with a fall of 2.48% in the current day.

The current value is still within the range considered as low volatility, with a limit of 125.27. However, the increase in recent hours has been exponential, the current score is only a slight setback.

Meanwhile, the main cryptocurrencies fall sharply, thus demonstrating a negative correlation with the volatility index.

BCRV 85 Crypto Volatility Index.
BCRV 85 Crypto Volatility Index.

The convulsive situation that has been developing in the last hours can be clearly observed from the index.

After remaining stable in sessions of low fluctuations, yesterday, March 8, the value jumped from 66 to a maximum of 127, a score that falls in the high volatility range, caused by the rapid fall in Bitcoin prices and other altcoins.

Crypto Volatility Index for 4 hours.
Crypto Volatility Index for 4 hours.

From the graph with candles of 1 hour of the index, we can observe the continuous attempts to diminish the volatility. However, a support 116 continues to maintain a bullish expectation for the short term. Otherwise, if this level is violated, volatility could drop to 100 as the first instance.

Crypto volatility index in timing of 1 hour.
Crypto volatility index in temporary 1 hour.

If you are interested in learning more about this index, visit our review of this by following this link.

In addition, it is relevant to let you know that you can operate it with Plus500 through CFD, with which you can use leverage to open positions larger than your initial capital. Leveraged products are high risk, so they are used with caution.

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