Bitcoin price moves closer to $20,000 as ‘much worse’ US data boosts stocks
Bitcoin (BTC) edged toward $20,000 as US stocks rose at the October 17 Wall Street open.
Stocks rise as US dollar falls
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $19,672 on Bitstamp, up 3.5% from the weekend’s low.
The pair rose in line with stocks, with the S&P 500 and Nasdaq Composite Index rising 2.7% and 3.2%, respectively, within thirty minutes of trading.
The action combined with weak US economic data in the form of the Empire State Manufacturing Index, which fell to -9.1 for October, well below the -4.3 forecast and September’s -1.5 reading.
“Manufacturing activity fell in New York State, according to the October survey,” the New York Federal Reserve summarized in a comment on the data.
“The general business conditions index fell eight points to -9.1. 23 percent of respondents reported that conditions had improved during the month, and 32 percent reported that conditions had gotten worse.”
Michaël van de Poppe, founder and CEO of trading company Eight, responded, calling the results “much worse than expected.”
“Top of yield and $DXY on the horizon. Bitcoin to rally,” he predicted.
With that, the US dollar index (DXY) continued to follow up in recent days, targeting 112 and down 0.65%.
“Risk active deflation in 2022 and Fed tightening despite world tilting toward recession portends an elusive endgame,” Mike McGlone, senior commodities strategist at Bloomberg Intelligence, wrote while summarizing recent macro analysis.
“Courier to lower prices may be needed in commodities to limit Fed restraint and plunge money supply. Cooling crude could fuel Bitcoin and gold.”
Research reinforces impending volatility
While traders already predicted some relief to hit crypto markets on weekly time frames, other perspectives repeated the fact that in the long term nothing had changed for Bitcoin in many months.
Related: ‘Get Ready’ for BTC Volatility – 5 Things to Know in Bitcoin This Week
“It is highly unusual for BTC markets to reach periods of such low realized volatility, with almost all previous instances preceded by a highly volatile move,” chain analysis 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 of 1-week rolling volatility below today’s value of 28% in a bear market have preceded significant price moves in either direction,” they continued.
In closing, Glassnode acknowledged that while the fuel for a potential price breakout was there, for example in BTC-denominated futures open interest hitting new all-time highs, there was “little noticeable directional bias in the futures markets.”
“Volatility is likely on the horizon, and Bitcoin prices are not known to sit still for very long,” the newsletter said.
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