Bitcoin price edges closer to $20K as ‘way worse’ US data boosts stocks
Bitcoin (BTC) headed toward $20,000 as United States equities gained at the Oct. 17 Wall Street open.
Stocks climb as U.S. dollar heads lower
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $19,672 on Bitstamp, up 3.5% versus the weekend’s lows.
The pair rose in line with stocks, with the S&P 500 and Nasdaq Composite Index gaining 2.7% and 3.2%, respectively within thirty minutes’ trading.
The action combined with weak U.S. economic data in the form of the Empire State Manufacturing Index, which fell to -9.1 for October, heavily below the forecast -4.3 and September’s -1.5 reading.
“Manufacturing activity declined in New York State, according to the October survey,” the New York Federal Reserve summarized in commentary on the data.
“The general business conditions index fell eight points to -9.1. Twenty-three percent of respondents reported that conditions had improved over the month, and thirty-two percent reported that conditions had worsened.”
Responding, Michaël van de Poppe, founder and CEO of trading firm Eight, called the results “way worse than expected.”
“Top on Yields & $DXY on the horizon. Bitcoin to rally,” he predicted.
With that, the U.S. dollar index (DXY) continued retracing recent gains on the day, targeting 112 and down 0.65%.
“Risk asset deflation in 2022 and Fed tightening despite the world leaning toward recession portend an elusive end game,” Mike McGlone, senior commodity strategist at Bloomberg Intelligence, wrote while summarizing fresh macro analysis.
“The lower-price cure may be necessary in commodities to curtail Fed restraint and plunging money supply. Cooling crude oil may be refuel Bitcoin and gold.”
Research reinforces impending volatility
While traders were already predicting some relief to hit crypto markets on weekly timeframes, other perspectives reiterated the fact that long term, nothing had changed for Bitcoin for many months.
Related: ‘Get ready’ for BTC volatility — 5 things to know in Bitcoin this week
“It is very uncommon for BTC markets to reach periods of such low realized volatility, with almost all prior instances preceding a highly volatile move,” on-chain analytics firm Glassnode showed in the latest edition of its weekly newsletter, The Week On-Chain.
Alongside a chart of Bitcoin’s realized volatility, researchers including lead analyst Checkmate argued that the market had reached a pivotal point.
“Historical examples with 1-week rolling volatility below the current value of 28% in a bear market have preceded significant price moves in both directions,” they continued.
Concluding, Glassnode acknowledged that despite the fuel for a potential price breakout being there, for example in BTC-denominated futures open interest hitting new all-time highs, there was “little discernible directional bias in futures markets.”
“Volatility is likely on the horizon, and Bitcoin prices are not known to sit still for very long,” the newsletter stated.
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