Bitcoin has seen sharp price fluctuations since Vice President Kamala Harris announced her candidacy for the July 2024 US presidential election.
The largest cryptocurrency attempted to test its previous all-time high of $73,738 on October 29, 2024, without success. Traders expect higher volatility as the election approaches and in the aftermath of the event. Crypto prediction markets like Polymarket and Kalshi provide insight into the views of crypto traders.
Polymarket is seeing trading volume of around $3.21 billion as participants bet on who will win the November election. Harris’ opponent, former US President Donald Trump, is the clear favorite, with 61.1% betting in his favor on Polymarket.
Kalshi, a prediction market regulated by the U.S. Commodity Futures Trading Commission, puts Trump’s chances of victory at 56.8% to Harris’s 43.2%. The betting contract had drawn $234.98 million as of November 5, 2024.
The effectiveness of betting markets in predicting the winner of elections remains questionable, but it sheds light on the sentiment of crypto traders.
Trump has rallied support among crypto traders with his pro-crypto approach to regulation and his speech at the Nashville Bitcoin Conference. The former US president shared his plans for a national Bitcoin reserve and proposed making the United States a world leader in BTC mining. The former president’s plan is that the United States will hold 100% of the Bitcoin in its possession.
Harris’ “Black Opportunity Agenda” is a proposal that reflects the vice president’s stance on crypto, although many details are left out, it indicates a measured approach to the asset class.
US markets won’t be open until late Tuesday as states count votes, but crypto is a major exception and a Trump victory could push Bitcoin closer to the $80,000 level, according to data from BTC derivatives markets.
Derivatives data is in a range between $60,000 and $80,000.
Deribit’s Bitcoin Volatility Index shows a steady increase in volatility since September 26, 2024, but the measure has failed to see a major movement like that noted during President Joe Biden’s exit from the presidential election , in July, and the correction of the American markets in August.
For the weeks following the election, data from the Deribit exchange highlights the $60,000 to $80,000 range as the one that collects peak open interest, or ongoing futures contracts for bullish and bearish bets from traders.
Inflow data from Farside Investors’ Bitcoin Spot Exchange Traded Fund shows a net outflow of $541.10 million on November 4. This marks the second day in a row that institutional investors have withdrawn capital from the asset, likely bracing for volatility in the aftermath of the election.
Combining prediction market data and BTC ETF flows from Farside Investors, we observe that institutional investors expressed confidence in Bitcoin and increased their capital flows when the chances of a Trump victory were higher, nearly 67% on October 30. a net inflow of $893.3 million on the same day.
In March, (BTC) Bitcoin hit its all-time high of $73,738 in response to the large influx of capital into US-based Spot Bitcoin ETFs. At the time of writing this article, Tuesday, November 5, Bitcoin is hovering around the $69,000 level, less than 10% from the all-time high.
Technical analysis: Bitcoin eyes turn to the new ATH
Key events since July 2024 have contributed to the price fluctuations seen on Bitcoin. TradingView’s BTC/USDT daily chart shows BTC’s attempt to test its previous all-time high after Harris announced his crypto proposal.
Derivatives data highlights the importance of the $60,000 to $80,000 range for the Bitcoin price. The asset has traded in this range throughout events since July, with the exception of its August 5 decline to $49,000.
BTC is in a short-term uptrend starting August 5 and the token could extend its gains, forming higher highs and higher lows, after election eve, thereafter. Bitcoin’s previous all-time high of $73,738 is key resistance and a successful breakout beyond this level could bring BTC closer to its target of $80,000.
Bitcoin Still Undervalued Ahead of Elections
Crypto.news spoke to experts to get insights on the price of Bitcoin.
“As the US election takes place today, many believe the price of crypto will be immediately influenced by which candidate wins, as they have different stances on the future of digital assets, with Trump historically being more inclusive than Harris in terms of digital assets. While this may be true in the short term, traders should also consider that the price of crypto goes beyond what the party directly supports and depends more on the policies they will implement regarding inflation, global political discourse and availability of digital investment opportunities. asset space.
BingX spokesperson
The BingX manager believes that the current cycle is one of the worst performing, after the Bitcoin halving, which suggests that BTC is still undervalued.
“If we look at other market sentiment indicators, crypto-related stocks have been rising, with MicroStrategy and Robinhood both rising in the month leading up to today’s election. In general, the digital asset community should expect to see the price of digital assets increase based on historical indicators alone.
“If the elected candidate supports crypto, it could boost market confidence; otherwise, it could introduce some uncertainty. Uncertainty surrounding the outcome of the elections could trigger fluctuations in the markets. Investors should closely monitor election developments and market reactions and be prepared to manage risks accordingly.
Ryan Lee, Chief Analyst at Bitget Research
“Politics is a secondary factor, and historical analysis suggests that one or two major catalysts typically drive bull markets.” Thielen explains that it would be absurd to “assume that when Fed Chairman Bernanke kept interest rates low in 2011, your neighbor suddenly decided to use Bitcoin to buy contraband on the Fed exchange.” Silk Road,” which means looking for a direct correlation between election results and Bitcoin. the price reaction may be less than ideal.
Markus Thielen, CEO of 10x Research
The executive says the main driver of the Bitcoin rally is institutional adoption of BTC, sparked by BlackRock’s request for a Spot BTC ETF earlier this year.
Disclosure: This article does not represent investment advice. The content and materials presented on this page are intended for educational purposes only.
