Why is the crypto market up today?
Bitcoin price is back at highs from mid-September, and BTC bulls have staged another attack on $21,000. Here are three reasons why the crypto markets are surging.
Bitcoin $21,295 has jumped to new seven-week highs and confidence is returning over the global macro outlook.
Essentially the most definitive charge on $21,000 has seen BTC/USD reach its highest levels since Sep. 13, data from Cointelegraph Markets Professional and TradingView confirms.
After volatility caused by the US Federal Reserve interest rate hike, Bitcoin made up for lost time and days later left bears and shorters in the dust.
With sentiment split over what the Fed will determine next month, there's still a way of lessening doom among crypto commentators, with predictions of $30,000 reappearing in November returning.
The picture for the rest of Q4 remains muddy, as some nonetheless count on 2022 to repeat the 2018 bear market. At the identical time, there's hope that this bearish pattern might be gone for good by the New Year.
The general crypto market cap has already passed the $1 trillion mark as soon as again, based on information from CoinMarketCap.
Cointelegraph takes a look at three main factors influencing crypto market strength within the current environment.
The Fed may change its tune on price hikes
Concerns focused on unwavering coverage keeping the U.S. dollar strong and charges surging higher for the foreseeable future — the worst-case situation for risk assets.
At the same time, rumors are gathering over the outlook for rate hikes because the Fed runs out of room to maneuver. After the November 75-basis-point hike, suspicions are that coverage will begin to U-turn, making smaller hikes in subsequent months before reversing altogether in 2023.
As such, any signal that the Fed is preparing to soften its hawkish stance is being seized on by markets weary from a year of quantitative tightening (QT).
December's Federal Open Market Committee (FOMC) is currently expected to yield a hike of 50, not 75, basis points, based on CME Group's FedWatch Tool.
Unemployment data launched on Nov. 4 fueled bulls' confidence. Coming in higher than expected, the implication may very well be that the speed hikes are having their desired effect — and that a pivot may thus come sooner rather than later.
Bitcoin volatility snaps record low levels
Analyzing information from Markets Professional and TradingView, it turns into clear that BTC/USD has been too quiet for too long.
That is particularly seen within the Bollinger Bands volatility indicator, which has been rarely nearer together in Bitcoin’s history and demanding a breakout for weeks.
Last month, Bitcoin volatility even fell beneath that of some main fiat currencies, making BTC look extra like a stablecoin than a danger asset.
Analysts had long anticipated the pattern to undergo a violent change, nevertheless; and true to form, crypto markets didn't disappoint.
A look at the Bitcoin historic volatility index (BVOL), recently at multiyear lows seen only a handful of instances, reveals that Bitcoin still has a technique to go to desert this characteristic.
“Pretty funny that volatility has been so compressed and we’ve become so conditioned as market individuals that the slightest 3% move feels like a 15-20% move,” William Clemente, co-founder of crypto research agency Reflexivity Research, commented.
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