A new report by 10x Research explores the recent Bitcoin BTC/USD price surge and its potential connection to former President Donald Trump‘s strong position in the 2024 election race.
What Happened: The report, titled “Is The Bitcoin Trump Pump Sustainable?”, highlights a 4% rally in Bitcoin’s price following news that President Joe Biden will remain in the race despite a poor performance in the presidential debate.
This decision, reportedly influenced by Biden’s family, comes amid polls suggesting that Biden—or even alternative Democratic candidates like California Governor Gavin Newsom—would likely lose to Trump in a general election.
Cryptocurrency analyst Markus Thielen notes that Trump, despite being a controversial figure, appears to be the only viable choice for many Americans at present.
The report suggests that Trump’s popularity and potential return to the White House are viewed positively by cryptocurrency markets, given his crypto-friendly stance.
Seasonally, July tends to be a positive month for Bitcoin, followed by weaker months in August and September.
This seasonal trend suggests that while Bitcoin could see short-term gains, a drop to $55,000 in the coming weeks remains possible.
Traders who bought Bitcoin near $60,000 may see short-term benefits, but medium-term predictions still lean towards lower prices.
Also Read: Why Bitcoin Could Plunge To $55K: 10x Research
Why It Matters: Technically, Bitcoin’s 21-day moving average stands at $63,750, which serves as a crucial level for reconsidering the bearish outlook.
The trend model has a moving stop at $68,900, with the $61,500 to $61,800 range being particularly significant for maintaining price levels.
Bitcoin mining companies face additional challenges during the summer months, particularly in Texas, where many operations are based.
High temperatures can lead to grid outages, potentially causing further selling pressure from miners needing to fund their operations as prices approach the $60,000 breakeven mark.
In recent weeks, Bitcoin balances on exchanges have increased by +18,500 BTC, though the 30-day flow remains negative at -12,500 BTC.
This increase in exchange balances typically signals a readiness to sell, explaining the recent +4% weekend rally. It appears that some traders might have pushed prices up to sell more Bitcoin at higher levels.
Money flow indicators do not suggest sustainable liquidity entering the crypto market.
Notably, Circle‘s USDC/USD has seen significant outflows, indicating a move from crypto back into fiat. Furthermore, discrepancies in ETF flow data from Farside and Blackrock have raised questions about the reliability of these metrics.
Despite Trump's lead in the polls being viewed positively for Bitcoin, the report concludes that consolidation is likely ahead.
Potential Mt. Gox Bitcoin flows this month, combined with sales from entities like the German government, could impact the market. Increased exchange balances and a potential decline in stablecoin growth are critical indicators to watch.
What’s Next: These dynamics and their implications for the cryptocurrency market will be a central topic at Benzinga’s Future of Digital Assets event on Nov. 19.
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