As Bitcoin BTC/USD trades near $70,450 on Thursday afternoon, traders are preparing for potential market swings linked to the upcoming U.S. election.
What Happened: According to data from CoinGecko, Bitcoin hit a recent high of $73,563, just short of its all-time high of $73,797 reached in March.
Market analysts, including Standard Chartered's Geoffrey Kendrick and YouHodler's Ruslan Lienkha, suggest that Bitcoin's trajectory in the lead-up to the election may see increased volatility, urging traders to approach this period with a careful strategy.
Kendrick, head of crypto research at Standard Chartered, believes that Bitcoin's price approaching the election will likely remain below $73,000 due to potential pre-election profit-taking.
"We're more likely to be lower than $73,000 than higher on election day due to potential pre-election unwinding," Kendrick said in a note shared with Benzinga.
Options markets are currently pricing in an anticipated surge in volatility tied to the election, with "a 7-day at-the-money volatility premium over the 30-day," which Kendrick explains is comparable to the pre-launch period of the first Bitcoin ETF.
According to him, this premium reflects traders' expectations for sharp movements around and after election day.
Kendrick's analysis projects possible price targets for Bitcoin in the near term, estimating a break-even scenario that could see Bitcoin reach $76,000 within a week and up to $78,000 over the next two weeks.
Should a Republican sweep occur, Kendrick believes Bitcoin could experience further gains, with prices potentially reaching $125,000 by the end of the year.
Also Read: Trump Vs. Harris: Who Are Whales Betting On And Who’s The Favorite Of Smaller Bettors?
Lienkha, chief of markets at YouHodler, highlights Bitcoin's sustained upward momentum since the start of 2023, with institutional players and major market participants driving the long-term trend.
He pointed out that while Bitcoin has experienced periods of correction and accumulation, these consolidations have laid a foundation for continued growth, a trend that may persist through 2025.
Lienkha's technical analysis identifies a flag pattern formation for Bitcoin's price over the past six months, often indicative of a trend continuation.
With Bitcoin breaking out of this pattern, Lienkha suggests that a new all-time high may be the next key objective.
He identifies $80,000 as a "psychological level" that may lead some investors to lock in profits, adding potential selling pressure as Bitcoin nears that threshold.
Speaking about the influence of global equity markets on Bitcoin, he noted that a significant correction in equities could spill over into crypto.
"Any significant equity correction will likely increase volatility in the crypto market, potentially complicating Bitcoin's upward trajectory," he explains. This connection between equities and digital assets underscores the interconnectedness of global financial markets and the influence they have on Bitcoin's movement.
Both Kendrick and Lienkha agree that a broader trend toward institutional adoption, as well as potential policy shifts, are likely to keep Bitcoin on an upward path post-election.
What’s Next: With Benzinga's Future of Digital Assets event set for Nov. 19, crypto investors and traders will have a timely opportunity to gather insights from industry experts on how to navigate these complex market dynamics and what to expect in the evolving digital assets landscape.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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