The massive drop in coordination with drops across the stock market has caused this week’s VIX volatility index to surge by over 6.9% at open, suggesting that there’s much more turbulence across traditional markets in the week ahead.
20-Year-Lows: Oil Prices Fall 40% At Open, Down 80% Year-to-Date
This morning when markets open, oil prices collapsed to the lowest prices in the past 20 years, and the Dow Jones Industrial Average fell by over 500 points as a result. Other stock market indexes also plunged following the news that the economy may not be reopening anytime soon.
Oil prices dropped by over 40% at open, and are down over 80% year-to-date.
The selloff could be partly responsible for causing Bitcoin to temporarily breach below $7,000 after the asset had spent the weekend trading above the key level.
But the coronavirus continues to keep the economy at a standstill, as citizens across the globe stay quarantined to prevent further spread of the dangerous and deadly pandemic.
Related Reading | Stock Market Prints TD9 Sell Signal, Correlated Bitcoin Could Plunge in Tandem
Peak coronavirus concerns last month caused an epic selloff across all markets, setting record-breaking numbers across a variety of assets.
Markets may soon be in for round two of the panic-induced selloff, according to the VIX volatility index.
VIX Volatility Index Hints At Turbulent Week Ahead in Traditional Markets
Starting off the week, the VIX has risen by 6.9% due to the extreme volatility in oil prices and the stock market, potentially signaling an extremely volatile week ahead.
VIX is the Chicago Board Options Exchange’s CBOE Volatility Index, and it is currently down 50% from the high reached in mid-March on “Black Thursday” when the stock market, cryptocurrencies, and nearly every other asset in the finance world saw record-breaking collapses.
The $$VIX begins the week +6.9% to 40.8.
More turbulence ahead
— Ted Darling (@tdarling1) April 20, 2020
The VIX has reached the highest levels since the 2008 economic recession but has yet to break the current record. Prior to this recent surge in volatility, the VIX only a handful of times over the last ten years reached over 40 – where the VIX is currently resting at ahead of what’s to come later this week.
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The stock market and Bitcoin have rallied from recent lows, but it is done so all while the economy is still on thin ice, and the coronavirus has yet to peak.