Volatility Index (VIX)

A volatility index, often abbreviated as VIX, is a measure of expected market volatility, often referred to as the "fear index." In crypto markets, VIX is an indicator of anticipated price swings. High VIX readings suggest increased uncertainty and potential for price fluctuations. Market makers monitor the volatility index to adjust spreads and trading strategies accordingly. Although traditionally associated with stock markets, volatility indices have counterparts in crypto to gauge market sentiment.