Wall Street freaked out Friday. VIX and bitcoin say the fear may fade Monday.

The VIX index, which measures expected volatility in the S&P 500, surged 21.5% to 19.99 on Friday as the benchmark stock index fell 1.09%. This marks the VIX's biggest one-day rise since June 5, when the S&P 500 experienced its worst day in months. Bitcoin, meanwhile, traded choppy but remained above $80,000 throughout the weekend, with its own volatility index showing no significant signs of stress.

Traders bet on sustained fear

Despite the potential for a Monday rebound, traders are positioning for the VIX to stay elevated through November. CNBC reports significant options purchases with traders buying 9,200 of the Nov. 18, 20-strike calls for $1.7 million and 12,500 of the Nov. 18, 23-strike calls for $1.1 million. These bets suggest traders expect the VIX to close above 23 by the third week of November.

This sentiment aligns with current macroeconomic pressures. AI stocks have been particularly hard hit recently, with default insurance costs for AI-related firms reaching record highs. Geopolitical tensions are also contributing to market anxiety, including incidents in the Strait of Hormuz where oil tankers caught fire after hitting mines, and escalating tensions between Russia and Ukraine.

Historical patterns suggest Monday calm

Historical data indicates Friday VIX spikes typically don't persist. CoinDesk's analysis shows that since January 1990, the VIX has jumped 20% or more on a Friday 32 times. In 25 of those cases, the VIX fell on the following Monday, rising only seven times. The typical Monday decline was 4.5%, and a month later, the VIX was lower in 25 of the 32 cases with a median drop of 16%.

Seasonal factors also support a potential VIX decline. The index has decreased in November in 25 of the last 36 years, with a median drop of 7.2%. From late October to year-end, the VIX has fallen in 22 of 36 years, with a median decline of 9.4%.

Bitcoin signals stability

Bitcoin's behavior over the weekend suggests Friday's market anxiety may not carry into Monday. The cryptocurrency has remained comfortably above $80,000 within its recent trading range. Volmex's BVIV, the bitcoin volatility index, slipped just 1% on Friday to under 40% and has remained relatively stable since.

Bitcoin has seen increased weekend activity this year, particularly on Sundays, as geopolitical tensions that began in March keep investors alert. This activity highlights bitcoin's role as a continuous macro asset that traders use to gauge global risk appetite when traditional markets are closed. On Polymarket, bettors see only a 9% chance of an AI bubble burst this year, indicating limited panic.

No guarantee of calm

Historical patterns don't guarantee future results. In seven of the 32 previous cases with significant Friday VIX spikes, the index continued climbing sharply on Monday, including in August 2015, February 2018 and August 2024. Even after Friday's surge, the VIX remains below 20, a level it has exceeded on more than a third of days since 1990, leaving room for further increases if fear persists.