As a seasoned crypto investor with a knack for navigating turbulent market waters, I find myself observing Bitcoin’s latest price movements with a mix of curiosity and caution. The correlation between Trump’s election odds and BTC‘s price action is noteworthy, and it’s something that I’ve witnessed firsthand in the past.
Today, Bitcoin’s (BTC) price decreased as investors shifted their focus towards the diminishing likelihood of Donald Trump’s victory in the forthcoming U.S. presidential elections, causing a market diversion.
Trump bets keep Bitcoin away from new highs
On the third day following Bitcoin’s peak at nearly $73,600 (its second-highest value of the year in 2024), its price fell to approximately $69,200 on November 1st. This decline represents a 4.65% drop within the last 24 hours.
The drop in the value of the cryptocurrency coincides with a narrowing gap between Donald Trump and Vice President Kamala Harris, the Democratic nominee, on prediction platforms such as PredictIt, Polymarket, and Kalshi, where people place bets on election results.
Bitcoin is often referred to as a “Trump investment haven” because of the previous president’s significant backing for the cryptocurrency industry, where he consistently championed its causes during his election campaign.
During the earlier part of the current week, while Trump maintained a larger advantage over Harris, Bitcoin neared its record high from March, which was $73,794 (as per Bitstamp data). It was only $194 shy of reaching that maximum point.
According to market analyst HornHairs, it was observed that the process of reducing risk in the market occurred around 5-6 days prior to the election in both 2020 and 2016.
“Price then went on to never retest the lows set the week before the election ever again.”
BTC price is retreating from overbought areas
Bitcoin’s price decline today is part of an overbought correction.
Since October 29th, when the daily relative strength index (RSI) for the cryptocurrency moved above the overbought zone at 70, it has been experiencing a downward trend.
It doesn’t automatically suggest an immediate reversal, but it hints that the surge might have been excessively intense.
As a crypto investor, I find it noteworthy that Bitcoin‘s recent dip has brought its value back within the boundaries of its existing upward-sloping channel, forming a pattern reminiscent of a rising wedge.
A “rising wedge” is often a pattern suggesting a bearish trend, where the price increases between two lines that are gradually converging, hinting that buying power could be decreasing. At present, Bitcoin’s price has fallen below the upper boundary of this wedge, potentially leading to drops towards the lower trendline estimated around $68,000.
As an analyst, I would anticipate that the Bitcoin price may enter a breakdown phase if it falls below the lower trendline. Following a technical guideline, the potential target for this breakdown can be calculated by adding the height of the wedge to the exact breakpoint where the downward slope begins.
Essentially, it’s possible that the value of Bitcoin might dip back towards the range of $55,500 to $58,000 over the remaining couple of months in 2021.
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2024-11-01 11:09