As the US presidential election approaches, traders are bracing for increased volatility in the Bitcoin market, predicting possible price fluctuations of 3.5%.
Analysts warn that despite strong bullish sentiment reflected in the options market, the possibility of delayed election results could lead to unexpected market shifts in the coming days.
“Markets may reduce volatility risk later in the week,” QCP Capital analysts stated, warning of potential post-election challenges.
Traders are bracing for volatile Bitcoin volatility as the US presidential election approaches, with strong bullish sentiment in options amid potential market uncertainty.
Market anticipation escalates as Bitcoin dominance rises
As the US presidential election approaches, Bitcoin’s performance has emerged as a focal point for traders. Current analysis suggests that Bitcoin’s dominance has exceeded 60%, reaching new cycle highs as enthusiasm for altcoins has declined significantly. Leading cryptocurrencies such as Ethereum and Solana faced sharper losses, demonstrating a growing preference for Bitcoin amid uncertain market conditions.
Options market reveals strong bullish sentiment
The options market has signaled marked bullish sentiment for Bitcoin, with around $3 billion of open interest expiring on November 8. Deribit CEO Luuk Strijers highlighted large positions in call options targeting strike prices of $70,000, $75,000 and even below $80,000, illustrating the collective optimism among traders about Bitcoin’s near-term prospects. This bullish stance seems unaffected by the recent market turmoil, showing confidence in the flexibility of Bitcoin.
Despite the prevailing optimism, experts stress the importance of preparing for potential volatility after election night. QCP analysts noted that the current low volatility premium suggests that the market may underestimate the risk of delays or disputed outcomes.
Bitcoin gains traction amid altcoins’ decline
As Bitcoin attracts more capital, the altcoin market is showing signs of recession. Bitfinex analysts noted that the dwindling interest in altcoins is associated with a lack of new market catalysts, leading to a pessimistic view of alternative assets. Ethereum recently recorded a 7% decline, while the value of Solana fell by around 10% over the past week. Analysts from Bitfinex noted “Without a new catalyst, altcoins struggle to recover.”
Bitcoin’s growing reputation as a safe-haven asset
Signum Bank’s investment report for the fourth quarter of 2024 confirms the expanding image of Bitcoin as a safe-haven asset, supported by the continuous capital flows it favors over alternative currency projects. According to the report, the trend points to a preference for productive projects economically as broader market uncertainty emerges in this context, Bitcoin’s growing market share reflects a shift in investor sentiment, in line with its traditional position as a store of value.
In short, as traders prepare for the potential bitcoin volatility surrounding the US presidential election, current indicators reveal a strong bullish stance in the options market along with a marked decline in altcoins interest. With major market players expecting confidence in Bitcoin’s flexibility, the election result could significantly affect trading strategies and investor sentiment in the following days. Stakeholders need to remain vigilant to developments market, especially with the emergence of risk of volatility after the election.
Grayskell’s report notes that while it’s difficult to assess whether financial markets account for a higher probability of Trump winning outright, the cross-asset returns observed in October are consistent with patterns we typically see in Trump trading.
Bitcoin recovers as Trump advances in presidential race
The price of Bitcoin (BTC) recovered slightly to around $68,800 on Tuesday, following a shift in the US presidential race that saw former President Donald Trump regain the lead, after US Bitcoin spot ETFs saw outflows of more than $540 million on Monday. The Grayscale report highlights the light is that cross-asset returns in October reflect trends typically seen in “Trump trading.” This includes increased positions in the dollar and cryptocurrencies and expectations of higher Treasury yields, which gained momentum as Trump strengthened his lead in predictive markets ahead of the election.
Donald Trump Advances as Bitcoin Recovers in Parallel
The price of bitcoin recovered slightly on Tuesday, putting Donald Trump back in the lead after prices fell amid large outflows of $541.10 million from spot ETFs on Monday, the QCP report says: “This coincided with a poll that showed Harris’ narrow lead in Iowa on Monday.”
Moreover, as we discussed in the previous article, the cryptocurrency community views Trump’s proposals as more specific and comprehensive than Harris’ proposals.
According to an analyst at FX Street, “On US Presidential Election Day, Predict It put Donald Trump back in the lead, albeit by a small margin Other platforms point to much stronger odds of Trump’s victory. Real Celar Polling’s average betting odds are currently Trump at 57.7 and Harris at 40.7.”
Meanwhile, polls suggest that the race will be much closer than the betting odds indicate. The TIPP poll showed Trump and Harris tied at 48 points nationwide, the Ipsos poll showed Harris leading by two points, 50 to 48, and the Atlas Intel poll showed Trump leading by one point, 50 to 49, according to Real Clear Polling.
