Bitcoin Dips Below $70K Amid VIX Spike and Risk-Off Signals

Bitcoin’s price is maintaining pressure below the $70,000 threshold on Tuesday, with market indicators pointing to the potential for fresh year-to-date lows should buyers fail to establish this mark as a solid support level.

The erratic fluctuations in Bitcoin’s valuation have intensified as volatility in the United States stock markets has reascended past a pivotal benchmark, coinciding with Treasury yields experiencing their most dramatic weekly plunge in several months.

Market observers indicate that this broader economic environment could foreshadow a prolonged period of subdued performance for Bitcoin’s price, even as on-chain metrics reveal that traders are holding out for a more compelling upward driver.

Key takeaways

• The CBOE Volatility Index, currently at 22.50, underscores escalating volatility in the markets and a shift toward risk-averse stances among investors.
• The yield on the US 10-year Treasury note stands at 4.02%, approaching its 200-day moving average for the first instance since March 2022.

Why Bitcoin may remain a “risk-off” asset for now

The CBOE Volatility Index (VIX), which gauges anticipated 30-day volatility for US stock markets, has risen to 22.50 in 2026, nearing its peak since November 21, 2025.

Such an uptick in the VIX generally signals heightened uncertainty and a waning enthusiasm for high-risk investments, creating a classic “risk-off” atmosphere that has repeatedly weighed on Bitcoin’s performance in the past.

The accompanying chart illustrates a consistent inverse relationship between Bitcoin and the VIX particularly when the latter hovers around the 20 mark. For instance, when the VIX surged beyond 20 in December 2024, Bitcoin reached a local peak of $104,000. A more pronounced climb above 25 during March and April 2025 corresponded with a steep Bitcoin retracement down to $80,000 levels.

Similarly, another exceedance of 20 in the fourth quarter aligned with Bitcoin attaining its cycle zenith close to $126,000, followed by a descent under $100,000 as the VIX once again breached that critical threshold.

Concurrently, the US 10-year Treasury yield dropped by 3.75% over the past week, settling from 4.28% to 4.05%—its most significant weekly decrease since September 2025. With the current reading at 4.02%, it is poised to challenge its 200-period simple moving average (SMA) for the first time since March 2022.

This decline in yields mirrors a broader defensive posture in conventional financial markets, which further bolsters the prevailing atmosphere of caution and restraint.

The Crypto Fear & Greed Index plummeted to 7 last week, marking one of its most extreme lows ever recorded. Asset manager Bitwise noted in its latest weekly update that although such profound fear levels have previously coincided with cycle bottoms, Bitcoin’s on-chain profit supply only fleetingly dipped to the 50% threshold amid the latest downturn. Historically, this metric has signaled more profound bear market corrections.

Stablecoin liquidity growth slows down

According to data from CryptoQuant, stablecoin reserves on exchanges swelled by $11.4 billion in the 30 days prior to November 5, 2025, demonstrating substantial purchasing capacity flowing into the cryptocurrency ecosystem.

Yet, as bearish pressures intensified, these reserves contracted by $8.4 billion by December 23, 2025, indicating an exodus of capital from the market.

In the most recent month, reserves across multiple exchanges have eased by a relatively mild $2 billion. While this represents a deceleration from the aggressive outflows seen in the fourth quarter, the absence of robust new inflows highlights persistently subdued liquidity dynamics in the sector.

Binance continues to lead in terms of exchange liquidity, commanding $47.5 billion in USDt and USDC reserves, which accounts for approximately 65% of all centralized exchange holdings. This includes $42.3 billion in USDt alone, reflecting a 36% increase compared to the previous year.

On the topic of stablecoin movements and reserves, cryptocurrency analyst Maartunn observed that USDC inflows to exchanges are once more trending downward, suggesting that substantial new liquidity has not yet materialized on a large scale.