However, some observers now argue that the selling has been overdone and central banks may be forced to step in to support the markets.

“Central banks, historically acting as shock absorbers, eventually came to the rescue and adopted a dovish tone, thereby implicitly indicating that ‘We are here to take care of the situation, so don’t worry,”’ Monish Shah, the head of ETF business at Mizuho Securities, told Bloomberg. “This will help stabilize the market and reduce volatility in the short term.”

After the heavy selling, short interest in VXX and UVXY has increased, according to Markit Data. About 89% of shares outstanding for VXX and 29% of UVXY are bearish positions, compared to 2.6% earlier this month.

Meanwhile, the VelocityShares Daily Inverse VIX Short-Term ETN (NYSEArca: XIV), which takes the -100% daily performance of short-term VIX contracts, attracted $440.3 million in net inflows so far this month. Inverse VIX ETPs allow investors to capitalize on a falling VIX or play on a calmer market conditions.

Max Chen contributed to this article.