Bitcoin’s price could see a surge in volatility after the U.S. presidential election, and analysts suggest this could positively impact its price outlook.
Early on election day, at 8:05 am UTC, Bitcoin remains well below its previous all-time high of $69,000. This subdued price movement reflects a cautious market sentiment as investors await election results, according to analysts from Bitfinex.
However, Bitfinex experts believe that a rise in volatility might boost Bitcoin’s price. They remarked that a lack of the anticipated volatility could signal underlying issues for Bitcoin, potentially leading to a more pronounced correction in shorter timeframes. In the options market, minimal price activity often aligns with a bearish tone rather than a stronger buying trend.
Bitcoin could benefit if former President Donald Trump wins, as he is seen as more favorable to crypto policies. Some analysts from Sygnum pointed out that a Trump victory could fuel the next Bitcoin rally, though they noted this could also occur if Vice President Kamala Harris were to secure the presidency. They commented:
“Post-election, the market is likely to maintain its upward trend as it anticipates positive regulatory shifts in the U.S. with the new administration taking office next January. Although market sentiment leans toward a Trump win, sparking a potentially stronger rally, positive developments may unfold regardless of the outcome.”
In the lead-up to the election, Bitcoin came within $200 of reaching a new all-time high, peaking at $73,600 on Oct. 29—the highest since March.
End of the Bitcoin “Trump trade” after elections?
Many investors have attributed Bitcoin’s October rally to what’s been termed a “Trump pump,” as its performance seemed to track Trump’s rising chances in the election.
But analysts at Bitfinex suggest that this “Trump trade” may end post-election. They noted that this trend has been primarily linked to pre-election speculation rather than any lasting momentum. Other analysts believe Bitcoin’s rally serves as a hedge on a Trump win, though they caution that the macroeconomic backdrop may not support a fresh all-time high for Bitcoin based on this alone.
Altcoin market set for more downside in the short term
Regardless of the election’s outcome, the altcoin market—comprising cryptocurrencies beyond Bitcoin and Ether—could see further declines.
According to Bitfinex analysts, smaller altcoins, particularly those outside the top 10, may continue to struggle after the election. They commented that general disinterest from speculators is weighing on altcoins, and without a significant catalyst, any upward movement seems unlikely. While some experts anticipate an altcoin season, they suggest returns could be less impressive than in past cycles.
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