Crypto volatility may spike if US election is ‘too close to call’ —FalconX

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As a seasoned researcher with over two decades of experience in financial markets, I have witnessed numerous events that have significantly impacted market directions and volatility. The upcoming U.S. election is no exception, especially given the uncertainty surrounding its outcome.

As several cryptocurrency investors attempt to predict the market’s movement by considering the results of the approaching U.S. election, one expert cautions that a tight race between the presidential contenders might cause some unforeseen market turbulence instead.

According to FalconX’s head of research, David Lawant, there might be extra uncertainty if the results are very close or take a long time to determine, which could lead to additional volatility in the market, as suggested in his November 1st report.

Market participants relieved to be done with ‘directionless trading’

Lawant pointed out that since April, the cryptocurrency market has shown no clear direction. Traders are likely to feel a sense of relief when the US election results are in, as this could provide clarity and potentially allow the markets to move forward more decisively.

Following a period of aimless stock market fluctuations lasting approximately six months, there seems to be an eagerness for the markets to progress beyond the election uncertainties and find solid footing,” he elaborated.

Since April, Bitcoin (BTC) has traded within a range of $53,991 and $73,149.

As a crypto investor, I find myself feeling optimistic about the upcoming U.S. election on November 5th, as many investors share this sentiment, hoping for positive results regardless of who wins. However, some of us believe that a Donald Trump victory might bring about even greater gains due to his clearer pro-industry commitments in relation to the cryptocurrency sector.

Likewise, as reported by CryptoMoon, Pav Hundal, the lead analyst at Swyftx, stated that “a Trump triumph might offer a burst of pleasure” or “a Trump win could spark feelings of joy.

Currently, it seems that options traders are optimistic about Bitcoin surpassing its record high within a few weeks following the election, no matter what the election result might be.

The latest figures from cryptocurrency exchange Deribit indicate that the Bitcoin Open Interest (OI), which represents the value or number of unfilled futures contracts due to expire in late November, is primarily focused on the price level of approximately $80,000.

Bitcoin and Solana are the stand outs, says Lawant

In simpler terms, Lawant pointed out that, just like Bitcoin, Solana (SOL) is often mentioned as a strong contender for outperforming other cryptocurrencies in discussions.

“BTC, serving as crypto’s proxy, could further benefit from ETF flows—2024’s primary source of new capital. SOL’s strong narrative positions it as a likely destination for profit diversification.”

Meanwhile, Lawant claimed that Ether (ETH) remains “notably absent from most discussions.”

The commentary comes only weeks after Dan Tapiero, founder of 10T Holdings, said that the US election outcome won’t change the bullish trajectory of cryptocurrencies such as Bitcoin, which will likely tap $100,000 per coin regardless of which presidential candidate wins.

“I don’t think it really matters. Everything is going up now. The election will pass,” Tapiero said of Bitcoin during a panel discussion at the Permissionless conference in Salt Lake City, Utah. 

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2024-11-02 22:10