Bitcoin markets experienced a stark shift in sentiment on June 3rd as key fear indicators flashed warning signals. The Bitcoin Volatility Index (BVIV) surged by 20% in its largest daily increase since February 5th, climbing to 46.45% after weeks of low volatility. Just a day later, the Crypto Fear & Greed Index plummeted to 11, its lowest reading in two months and deep within the "extreme fear" zone.
The sudden turbulence followed a sharp drop in Bitcoin's price. After trading around $75,000 last week (down from $82,000 in May), the cryptocurrency fell over 6% on Tuesday to $66,000. Analysts noted that until this point, the decline had been orderly, with BVIV lingering near 40% as steady selling pressure dominated. The latest crash, however, triggered a rush for hedging and a surge in options market activity.
"The ongoing price correction is completely related to Bitcoin demand conditions and has nothing to do with stocks, oil or macro," said CryptoQuant head of research Julio Moreno. He revealed that combined spot and futures demand for Bitcoin contracted by 232,000 BTC over the past 30 days, underscoring the demand-driven nature of the sell-off.
Market experts highlighted that BVIV is behaving increasingly like a traditional fear gauge, moving inversely to Bitcoin's price. While some commentators see extreme fear as a potential contrarian buy signal, recalling that the index hit a low of 5 in February before stabilizing, it remains unclear whether the current volatility marks a short-term panic or the beginning of a prolonged turbulent phase.
