The second quarter of 2020 has just come to a close, reaching the halfway mark on what has been a surprisingly turbulent year in finance.
The start of the year saw major stock indices setting new all-time highs. But the sudden onset of a pandemic and the lockdown designed to contain it dealt a crushing blow to the economy.
Before Q1 came to a close, all major markets saw a significant collapse. The quarter that started by setting positive records then closed at a record loss.
With the back half of the year primed for more explosive action, traders can prepare for the coming turbulence with PrimeXBT.
Q1 Stock Market Shakeup Leads to Record Q2 Recovery, What’s Next For Q3 and Q4?
Coinciding with the widespread shakeup, the Chicago Board Options Exchange Volatility Index, or VIX for short, pushed through a level that in the past has historically signaled a long term stint of market turbulence and increased volatility.
These phases, after VIX passes through this level, tend to keep markets hot and opportunistic for several years to come.
Following the shocking move on Black Thursday that crushed stocks, crypto, precious metals, and more, things have since cooled off by comparison.
However, VIX remaining so elevated means that the current tranquility will be short-lived, and a return to extreme market turbulence is due again soon.
The stock market has been on a steady rise and is retesting former highs. A breakthrough resistance is a perfect setup for a long position as the V-shaped recovery confirms. If stock indices are rejected from highs again, shorting with PrimeXBT is the best bet.
VIX Breakout Results In Extended Bouts of Extreme Market Volatility
Comparing past data with current price action, the two previous times the VIX gave a reading of 16 or higher, it remained above the key level for 2000 days or more.
In the chart above, the first seven and a half year run started with a strong uptrend, followed by a peak around the turn of the century.
The second bout of extended volatility and elevated VIX readings took place during the 2008 Great Recession and lasted over five years.
It was during the aftermath of this recession that Bitcoin was created.
Bitcoin Also Prepares For Explosive Breakout In Crypto Market
Bitcoin is also showing signs that volatility is about to pick up in a significant way. According to the 3D Bollinger Bands Width, the asset has reached some of the lowest levels ever recorded on the indicator.
Bollinger Bands Width is used to measure volatility and a lack of. Low readings suggest volatility is non-existent. However, then this happens, the Bollinger Bands converge and squeeze, and a powerful move results.
Bitcoin traders can get ready for the breakout of an explosive move with PrimeXBT. Technical analysis tools keep traders armed with vital market intel that may help them predict which direction Bitcoin is heading next.
The platform also offers tools for traders to set a stop loss and take profit levels to preserve capital during any, especially violent movements.
Get Ready For More Record Breaking-Turbulence With PrimeXBT
The end of Q1 and all of Q2 proved that this type of market turbulence, while negative for investors, is an ideal opportunity for traders.
Asset prices swing wildly back and forth as markets attempt to stabilize and price in an inflating monetary supply and a crashing economy due to a pandemic.
And with cases globally starting to rise again, the catalyst for more volatility is ready to go.
There’s no better platform to prepare for what’s to come than PrimeXBT. The award-winning Bitcoin margin trading platform offers forex, commodities, stock indices, and crypto trading all under one roof.
This means no matter which market catches fire next, traders can take advantage. And with long and short positions available through CFDs on the most sought after trading instruments, such as gold, oil, Bitcoin, and more, traders can be ready whichever direction the trend heads next.