Is the crypto market going up right now?

Bitcoin (BTC) has jumped up 5% on Nov. 10, and confidence returned through the global macro outlook and the news that FTX started. partially open withdrawals for users.

The Crypto market and equities responded to the data (Consumer Price Index (CPI) which showed inflation at 0.4% for the month and 7.7% from a year ago which was less than the expected 0.6% monthly and an increase of 7.9%. The news was sent to the Nasdaq up. 6% and put it on pace for the biggest daily profit since 2020.

After volatility caused by FTX’s potential insolvencyBitcoin price reacted with positive news opening withdrawals and positive movements of equities increase $1,000 in minutes.

Nasdaq and Bitcoin 3 month chart. Source: TradingView

With volatility still likely to be in the middle FTX condition occursThere is still a sense of doom reduction among crypto commentators, but few analysts believe the bottom is still not in for the crypto market.

The picture for the rest of Q4 remains cloudy, as some analysts still expect 2022 to copy the bear market of 2018. At the same time, there is hope that this bearish trend will gone for good by the beginning of 2023.

The overall crypto market has been positive, including Solana (sole) which increased by 20% since Nov 9 and even after lost 32.4% of the total value locked in the decentralized finance ecosystem (DeFi).

Let’s examine the three main factors affecting the strength of the crypto market in the current environment.

The Fed may change its tone on rate hikes

As Cointelegraph reported on why the crypto market saw fresh losses last month, the Federal Reserve of the United States was first on the list.

Concerns focus on unsustainable policies keeping the US dollar strong and rates surging high for the foreseeable future – a worst-case scenario for risk assets.

At the same time, rumors are gathering over the outlook for rate hikes as the Fed runs out of room to maneuver. After November’s 75-basis-point hike, it is suspected that policy will begin a U-turn, making the hikes smaller in the coming months before reversing everything in 2023.

As such, any signal that the Fed is preparing to soften its hawkish stance is muted by markets weary of a year of quantitative tightening (QT).

Federal Open Market Committee (FOMC) this December expected to produce a hike of 50 basis points, not 75, according to CME Group’s FedWatch Tool.

Fed target rate probability chart. Source: CME Group

unemployment data released on November 4 fueled the bulls’ confidence. Coming higher than expected, the implication is that the rate hike is having the desired effect – and that the pivot may come sooner rather than later.

Bitcoin volatility snaps record low levels

Analyze data from Cointelegraph Market Pro and TradingViewIt became clear that BTC / USD has been too quiet for too long after reaching a annual bottom under $16,000.

This is especially visible in the Bollinger Bands volatility indicator, which has rarely been close together in the history of Bitcoin and has been demand a breakout for the week.

BTC/USD candle chart 5 days (Bitstamp) with Bollinger Bands. Source: TradingView

Last month, the volatility of Bitcoin even fell below that of some major fiat currencies, making BTC look more like a stablecoin than a risk asset.

Analysts have long expected the trend to undergo a violent change, however; and true to form, the crypto market does not disappoint.

A look at the historical volatility index of Bitcoin (BVOL), recently at multi-year lows seen only a handful of times, shows that Bitcoin still has a way to abandon this characteristic.

“It’s funny that volatility has become so compressed and we have become so conditioned as market participants that the slightest 3% move feels like a 15-20% move,” William Clemente, co-founder of crypto research firm Reflexivity Research, Kiran.

Bitcoin historical volatility index (BVOL) 1-week candlestick chart. Source: TradingView

Dollar is looking at a new chapter

After a parabolic uptrend throughout 2022the US dollar is only beginning to show signs of weakness.

Related: Bitcoin seller fatigue hits 4-year low in ‘typical’ bear market move

After a parabolic uptrend throughout 2022the US dollar is only beginning to show signs of weakness.

The US dollar index (DXY) recently hit its the highest level since 2002and the momentum can still go back to take it even higher – at the expense of risk assets and major currencies agreed.

Meanwhile, however, DXY is under pressure, and its derivatives came in lockstep with the return to form for Bitcoin and altcoins.

This flag is a problem that Bitcoin bulls are keen to shake – a strong correlation occurs with the traditional market and inverse correlation with the dollar.

“Bitcoin currently has a correlation with Gold of around 0.50, reaching 0 in mid-August,” trading firm Barchart said. disclosed in October.

“Although the correlation is higher with $SPX (0.69) and $QQQ (0.72), the correlation has decreased of late.”

Fellow analyst Charles Edwards, founder of crypto asset manager Capriole, note that Bitcoin below the macro price is often accompanied by increasing gold correlation.

BTC/XAU correlation chart. Source: Barchart/Twitter

Overall, the crypto market may still have a volatile day ahead according to analysts, but the positive news of FTX resuming withdrawals provides a nice bump.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade involves risk, and you should do your own research when making a decision.