Bitcoin (BTC), Ether (ETH) and other cryptocurrencies have given back their gains despite cooling inflation.

After jumping to one-month highs, BTC price action, as well as that of major altcoins, has reversed downwards — but why?

Volatility across the board accompanied the latest United States macroeconomic data and comments on policy from the Federal Reserve.

After initially benefitting from the Consumer Price Index (CPI) numbers, which showed inflation slowing beyond expectations in November, crypto and stocks flipped bearish.

That kind of behavior is nothing new, as previous CPI releases have seen identical reactions this year.

This time around, however, there is plenty for crypto investors to worry about — beyond macro, the FTX saga rolls on, with concerns around Binance also lingering.

Continue reading to discover three key areas putting a crypto “Santa rally” in jeopardy this week.

U.S. stocks down post-CPI and FOMC

Despite underperforming stocks in the wake of FTX, crypto nonetheless retains notable correlation in times of macro volatility.

This week’s CPI print was no exception — stocks initially gained thanks to CPI numbers showing U.S. inflation falling quicker than expected.

The following day saw the Federal Open Market Committee (FOMC) meeting conclude with a 50-basis-point interest rate hike — lower than previous ones and broadly anticipated.

Despite that, a subsequent speech from Fed Chair Jerome Powell did not deliver quite the result that bulls wanted. The initial CPI hype died down, and on Dec. 15, stocks began to fall noticeably, taking crypto with them.

At the time of writing, the Dow Jones, S&P 500 and Nasdaq Composite Index were down 2%, 2.2% and 2.6%, respectively.

BTC/USD returned back below $17,500, having hit one-month highs of nearly $18,400 the day prior. ETH/USD was down over 5% in 24 hours, data from Cointelegraph Markets Pro and TradingView showed.

With stocks continuing a macro retracement, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, had an alarming take on the action.

“Some 1929-Like Forces at Work in 2022 – The 2021 pump in US liquidity can be compared with the stock-market bubble of 1929, with implications for similar outcomes,” he warned.

U.S. dollar bounces from six-month lows

At the same time as the step down for equities and crypto, the U.S. dollar has seized the chance to make up for lost ground.

Having hit its lowest levels since June this week, the U.S. dollar index (DXY) is busy attempting to put in a multi-month floor.

DXY is currently retargeting 105, having fallen below 103.5 on FOMC day.

“The dollar is bouncing hard for now at support. Nobody wants to see this. Except maybe Jerome Powell, since he hates us all,” analyst, trader and podcast host Scott Melker wrote in a tongue-in-cheek response.

Looking ahead to 2023, popular Twitter analytics account DJ meanwhile said that the ultimate outcome could be DXY “ripping higher” after consolidating.

“DXY playing out as expected,” he commented on the weekly chart.

“First wave down (prob A of 4) looks potentially completed here. We could be in for a fairly lengthy sideways consolidation through most of 2023, much like 2015, before ultimately ripping higher to complete the count.”

A key trend line for DXY comes in the form of the 200-day moving average, which it recently lost for the first time since mid-2021.

Binance fields ongoing FTX “FUD”

Waiting in the wings to unsettle crypto market sentiment specifically, meanwhile, is the ongoing saga involving now-defunct exchange, FTX.

Related: Bitcoin bear market 70% dip kills BTC ‘tourists’ as metric screams buy

As Cointelegraph continues to report, it is largest global exchange Binance now in the firing line as accusations over illiquidity and suspicious maneuvers abound.

CEO Changpeng Zhao, known as CZ, has repeatedly sought to console the market and rebuff what he has called “FUD” about Binance.

Nonetheless, traders have already voted with their feet, withdrawing billions of dollars in crypto over the past week.

Any negative news could thus easily exacerbate markets’ cold feet.

“People can withdraw 100% of the assets they have on Binance; we will not have an issue in any given day,” Zhao told CNBC in an interview on Dec. 15.

The views and opinions expressed here 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 conduct your own research when making a decision.