Key Takeaways:

• The VIX index, known as Wall Street’s “fear gauge”, has surged to its highest level since October 2020 as trade tensions between the U.S. and China escalate.
• Following recent developments where China enforced retaliatory tariffs on U.S. goods, traders have heightened their expectations for interest rate cuts to 116 basis points this year, an increase from 100 basis points.
• Bitcoin’s value dropped 0.7% to $82,500, with its 30-day implied volatility reaching an annualized 54.6%, marking the highest level in two weeks.

The VIX index indicates market forecasts for 30-day volatility in equity markets and has recently climbed to 39, reflecting substantial tensions after China imposed tariffs on the U.S.. According to TradingView’s data, this significant increase, along with a steep selloff in U.S. stock-index futures, triggered traders to boost their forecasts for Federal Reserve interest rate reductions.

Additionally, on the day of reporting, Bitcoin traded lower at $82,500, following earlier spikes above $84,600. The increase in 30-day implied volatility reflects traders’ concerns as they adjust their positions amid evolving market conditions.