Second and final week of our macroeconomic and political marathon. Before elections which promise to be tumultuous and the next Fed meeting on Thursday, the tension on the markets is palpable. How could Bitcoin react?
What impact could the US election have on Bitcoin?
It is Monday, November 4, 2024 and the price of Bitcoin is moving around $68,600.
The inflection point awaited for so many months is upon us, the American election has never been so close. The results are expected overnight from Tuesday to Wednesday in France.
The first estimates could arrive between 1 and 5 a.m., but the final result could take several days if recounts are necessary or if events disrupt the smooth running of the votes.
The impact of the choice of the future president on the markets is not clear to anyone; However, one thing seems obvious to everyone: this event should bring a powerful increase in volatility.
| Pairs with Bitcoin | 24 hours | 7 days | 1 month |
| Bitcoin/USDT | +0.40% | +0.30% | +10.40% |
| ETH/Bitcoin | -0.10% | -3.10% | -8.00% |
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A new peak of volatility to be expected for the American election
Volatility is the central factor that everyone agrees on for this election and post-election period. No one can claim to know the direction that Bitcoin will take, but few imagine that the queen of cryptocurrencies could remain unmoved.
Kamala Harris has not particularly shown support for cryptocurrencies and has left regulation in persistent limbo, while the SEC has put the industry in trouble by launching lawsuits against various players in the ecosystem. Although campaign rhetoric has softened towards the crypto ecosystem, the Democratic candidate does not seem to place digital assets among her priorities.
Donald Trump, for his part, is carrying out a seduction operation to attract crypto holders. At the Bitcoin Conference 2024, he gave a pro-crypto speech, introducing himself as “ the pro-innovation, pro-Bitcoin president America needs ». He himself is an industry player with several NFT collections to his credit and the World Liberty Financial project.
This election could thus mark a major turning point for an industry which has been waiting for many months for clarification of American regulations, essential to promote its development. Beyond the choice of a pro-crypto candidate, the expected change aims to adopt a regulatory framework clarifying many points that are still unclear in the United States, notably the status of crypto-assets: securities or securities. amenities?
Volatility History for Bitcoin
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Bitcoin, derivatives markets, always on the verge of excess
The impulse beyond $70,000 was accompanied by a bullish speculative surge, which the liquidations of short positions did not make it possible to purify. A correction was necessary to prepare for a more organic movement.
A first correction up to $68,000 has developed, bringing open interest and funding into a more natural zone for the year 2024. We nevertheless remain at historically high levels, very close to an excess zone. .
The behavior of speculators could therefore soon tell us whether this correction was sufficient. Furthermore, market sentiment is rather negative: many remain positioned on altcoins and are experiencing a dominance that continues to increase.
These players could seek to quickly take gains on upcoming movements, using uncontrolled leverage, which would accentuate volatility and erratic movements.
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Bitcoin, a last correction before the bullish revival?
BTC closes the week with a shooting star candle after retesting its ATH and absorbing plenty of liquidity along the way. If the shape of this candle is not bullish, testifying to a significant rejection at the historic peak and a potential reversal configuration, there is still hope!
It is precisely because Bitcoin did not manage to cross its ATH that there is still liquidity to hunt, and the worst has been avoided: a re-entry configuration in the form of a bull trap.
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In a context where the trend and momentum indicators are rather favorable to an increase in the medium term, we can establish 3 scenarios for BTC:
- Tight consolidation before crossing the ATH : this scenario is based on consolidation above $67,700, with possible excesses around $66,000;
- Deep correction to chase liquidity around $61,000-$63,000before re-entering above $66,000 and relaunching with vigor;
- Deep correction with bearish crossing of $58,000. This is the reversal scenario that could lead us to revisit the lower part of the range of recent months, around $50,000.
Although we can still envisage a bearish scenario, the direction of the charts is bullish, and the probabilities favor an upward breakout. The pace of the market nevertheless invites us to look for a low higher than the last significant low.
If this could be at $65,000 if the historic high is crossed, it remains at $58,000 at this stage, making this level the guarantor of a weekly trend reconstructed into an uptrend.
Weekly Bitcoin price chart
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In summaryBitcoin fails in its quest to establish a new all-time high. BTC price consolidates in a tight retracement zone favoring an upcoming bullish breakout. However, last week's candle shape could validate a ” shooting star » in the event of a close below $67,500, adding to the likelihood of a return close to $60,000.
So, do you think BTC can emerge from its 2024 consolidation? Don't hesitate to give us your opinion in the comments.
Have a nice day and we’ll see you next week for a new analysis of Bitcoin.
Sources: TradingView, Coinglass, Glassnode
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Analyst at Cryptoast Research for several years, I carry out in-depth monitoring of the crypto market to analyze the next narratives while keeping an eye on the financial markets.
Emmanuel Lazaro
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