Traders of the virtual currency Bitcoin are bracing themselves for a wild ride in the final stretch before the election. This comes as tumbling key price levels and Fed policy uncertainty create an election potentially fraught with hazard. With the U.S. election looming, Bitcoin traders and investors are bracing for potential swings in the leading cryptocurrency’s price.
According to analysts, the price of Bitcoin may fluctuate 10% in either direction due to the election’s outcome. Based on crypto derivatives operator Deribit, this comes at a time when Bitcoin has just registered its three-month high in volatility. The rising volatility indicates traders are getting increasingly unsure, fueled by economic and geopolitical tensions related to the elections.
Analysts Predict a 10% Movement in Price
According to popular crypto analyst Daan Crypto Trades, who commands a huge following on social media, Bitcoin will see a 10% swing depending on election outcomes. On Nov. 3, the analyst told his 389,000 followers on X that although Bitcoin’s weekly close was not ideal, this could be dwarfed by the election.
Daan’s comments come as other market analysts predict the election will drive the price of Bitcoin up or down depending on which candidate is victorious. Such a prediction adds to the assumption that the election outcome will be a key event for the cryptocurrency market.
Key Levels to Watch: $65,000 Support and $74,000 Resistance
Tony Sycamore of IG Markets recently stated that Bitcoin is at a crucial juncture. He explained that the price must break upwards through its $74,000 resistance level to confirm the presence of an uptrend, pushing back to test new highs around $80,000.
However, Sycamore warns that if Bitcoin breaks below its $65,000 support, it risks negating all its recent gains. A breach could throw Bitcoin into the downtrend channel, a route it has held for the last seven months. Traders are closely watching these levels for a change in Bitcoin’s course.
Election’s impact on Bitcoin trajectory
The U.S. election, in which Trump and Harris have taken opposing sides on crypto, has ratcheted up the interest of the crypto community. Trump has favored the crypto industry of the United States by seeking an enabling policy environment for adopting digital assets. His pro-crypto stance thus becomes popular among traders who speculate that a Trump win will bring a Bitcoin rally.
On the other hand, Harris has been more quiet about cryptocurrencies. However, on Sept. 22, she said her administration would consider legislating to support digital assets and artificial intelligence investments. While Harris’s position is still vague, her framing could indicate a technology development-friendly policy rather than a crypto-first approach.
Federal Reserve’s Role in Bitcoin’s Possible Rally
Some analysts expect that after the Fed cut interest rates by 50 basis points in September, further cuts will remain on the table. Lower interest rates in traditional investment markets make investments less attractive, and investors flow towards assets such as Bitcoins.
Historically, crypto markets have benefited from rate cuts as investors seek higher returns. If the Fed keeps cutting rates, Bitcoin will likely attract more investment regardless of who wins the election.
Positive Sentiment Builds in the Bitcoin Market
Despite election-related fears, Bitcoin’s market sentiment has been bullish lately. Positive factors such as regulatory developments and the Fed’s accommodative approach have bolstered Bitcoin’s strength. Bitcoin surged to $74,649 late in October but has witnessed a downtrend as we progress into November. Still, many investors feel it might revisit the highs post-election.
What to Expect from Bitcoin?
With the U.S. election nearing its end, analysts warn crypto investors against probable volatility. Traders should focus on these key price levels and election dynamics because they will drive Bitcoin’s next moves. Experts predict that prices will fluctuate 10% after the election results are out.
If Trump wins, with his friendly approach toward the digital asset, the result would be short-term gains for Bitcoin. On the other hand, if Harris wins, her careful approach will more likely put up a hedge. Meanwhile, rate cuts by the Federal Reserve could create a favorable environment for Bitcoin investment.
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