Bitcoin (BTC) Flashing Strong Bullish Signals as VIX Drops and Crypto Liquidity Surges

Bitcoin (BTC) is flashing strong bullish signals across macroeconomic and on-chain indicators

Bitcoin (BTC) price is flashing strong bullish signals across macroeconomic and on-chain indicators, with analysts predicting a potential breakout to $135,000 within the next 100 days. At the core of this forecast are three key drivers: low market volatility, signaled by the CBOE Volatility Index (VIX), growing stablecoin liquidity, and a negative BTC funding rate setting up a possible short squeeze.

VIX drops to 18, setting stage for $135K Bitcoin price

Bitcoin network economist Timothy Peterson shared a model on X (formerly Twitter) linking Bitcoin’s price to the CBOE Volatility Index (VIX). As explained by Peterson, VIX below 18 aligns with “risk-on” sentiment, where investors prefer stocks and capital tends to flow into crypto.

According to Peterson, if the VIX stays below 18, his model — which claims a 95% accuracy track record — forecasts a $135,000 Bitcoin price within 100 days. This will be fueled by declining risk aversion and bullish capital flows into crypto assets.

"If the VIX stays below 18 for the next 100 days, we'll likely see new highs in the stock market, capital flowing out of bonds and back into riskier assets like Bitcoin," Peterson stated.

During the last time the VIX dropped below 18 for a 50-day period, in 2021, Bitcoin experienced a rally from $30,000 to $69,000.

However, during periods of equity corrections or contracting liquidity, which usually coincides with a VIX above 18, Bitcoin’s performance becomes less predictable — contrasting with gold’s steadier role as “hard money.”

"The last time the VIX stayed below 18 for 50 days was during the 2021 bull market, when Bitcoin went 2x from $30K to $69K," Peterson added.

Stablecoin market cap hits all-time high as crypto liquidity surges

Data from CryptoQuant shows that the total stablecoin market cap has reached $220 billion, marking an all-time high. This is widely seen as a bullish indicator for crypto markets since stablecoins act as dry powder for new purchases.

The increase in liquidity supports the bullish case for Bitcoin, signaling capital inflows into the broader crypto ecosystem.

"The chart shows that we're currently at the highest point in history for stablecoin market cap," the crypto analytics firm stated.

According to Ben REichert, a derivatives trader at FTX, the last time we saw such a rapid increase in stablecoin supply was during the 2021 bull market, which ultimately led to Bitcoin’s previous all-time high of $70,000.

"The last time we saw this much stablecoin supply flow into exchanges was during the 2021 bull market, which ultimately led to Bitcoin's all-time high of $70,000," Reichert explained.

However, it’s important to note that while this signals a potential build-up of buying pressure, the actual price movements of Bitcoin and other cryptocurrencies will depend on a variety of other factors, including market sentiment, macroeconomic conditions, and regulatory developments.

BTC funding rate hits record lows as short positions increase

In a significant development, Bitcoin (BTC) perpetual futures funding rates have flipped negative, reaching their lowest point in 2025. This suggests that short positions now dominate, as traders are increasingly betting against the rally.

As shown in Velo.chart’s 4-hour BTC funding data, this imbalance creates conditions for a short squeeze, where rising prices force short sellers to cover positions — accelerating upside moves.

According to reports from Cointelegraph, over $3 billion in short positions are at risk of liquidation, potentially driving Bitcoin past $100,000 in the near term.