A relief bounce is seen in business risk assets after October’s Empire State Manufacturing Index numbers fell far short of expectations.
Bitcoin
BTC
dial down
$19,835
It headed towards $20,000 when US stocks opened on Wall Street on October 17.
BTC/USD 1 hour candle (bit stamp). Source: TradingView
Stocks Rise as US Dollar Heads Lower
Data from Cointelegraph Markets Pro and TradingView shows that BTC/USD hit $19,672 on Bitstamp, up 3.5% from the weekend low.
The pair rose in line with equities, with the S&P 500 and Nasdaq Composite Index rising 2.7% and 3.2%, respectively, within thirty minutes of trading.
The action was combined with weak US economic data in the form of the Empire State Manufacturing Index, which fell to -9.1 in October, well below the -4.3 forecast and -1.5 reading. of September.
“Manufacturing activity decreased in New York state, according to the October survey,” the New York Federal Reserve summarized in commenting on the data.
“The overall business conditions index fell eight points to -9.1. Twenty-three percent of respondents reported that conditions improved during the month, and 32 percent reported that conditions worsened.
In response, Michael van de Poppe, founder and CEO of trading company Eight, called the results “worse than expected”.
“Top in yields and $DXY on the horizon. Bitcoin will rally,” he predicted.
With that, the US Dollar Index (DXY) continued to retrace recent gains on the day, hitting 112 and falling 0.65%.
“Risk asset deflation in 2022 and the Fed tightening despite the world tilting toward recession portends an elusive endgame,” wrote Mike McGlone, senior commodity strategist at Bloomberg Intelligence, summarizing a new macro analysis.
“Lower price cure may be needed in commodities to limit Fed dovishness and move money supply. Crude oil cooling may boost Bitcoin and gold.
Japanese US Dollar Index (DXY) 1-day candlestick. Source: TradingView
Research reinforces impending volatility
While traders have already forecast some relief to hit the crypto markets on weekly time frames, other perspectives reiterated the fact that in the long term, nothing has changed for Bitcoin for many months.
Related: “Get Ready” for BTC Volatility: 5 Things to Know About Bitcoin This Week
“It is highly unusual for BTC markets to reach periods of such low volatility, with almost every previous instance preceded by highly volatile movement,” noted on-chain analytics firm Glassnode in the latest edition of its weekly newsletter, The Week On. . -String.
Alongside a chart of Bitcoin’s realized volatility, researchers, including lead analyst Checkmate, argued that the market has reached a turning point.
“Historical examples with 1-week rolling volatility below current value of 28% in a bear market have predicted significant price moves in both directions,” they continued.
Bitcoin 1-week realized volatility chart (screenshot). Source: Glassnode
In closing, Glassnode acknowledged that while the fuel for a potential price breakout exists, for example with BTC-denominated futures open interest hitting new all-time highs, there is “little perceptible directional bias in futures markets.”
“Volatility is likely on the horizon, and bitcoin prices are not known to be stable for long,” the bulletin said.
The views and opinions expressed in this document are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
