As U.S. Votes, Bitcoin Flirts With $70k — Which Way Will It Break?

With the Fed meeting and elections approaching, could Bitcoin eventually surpass $70K, or is the bearish trend too strong to allow BTC to rise?

BTC teetering on the edge

With the US presidential election just hours away, the crypto market is on edge, watching every move of the Bitcoin (BTC) price as it moves towards the critical $70,000 level.

BTC 6-month price chart | Source: TradingView

As of November 4, BTC is facing a new resistance at the $70,000 level. Recently, on October 29, Bitcoin briefly rose to $73-74k but saw the bearish trend pull it back.

Risks are high not only because of the elections, but also because of the Fed meeting to be held on November 6-7, where economic clues are expected.

Interestingly, Republican Donald Trump’s chances of winning now, according to Polymarket odds, are 59%, down from 66% on October 30. Bitcoin’s movements appear to be closely intertwined with these changing election predictions.

Democratic nominee Kamala Harris saw her chances rise from 33% to 42% as of Nov. 4, just hours before Americans went to the polls. Trump’s win was touted as bullish for crypto, adding another layer of expectation.

What could push Bitcoin higher or lower next as BTC waits for the next big trigger? Let’s break down the fundamental factors, explore potential market catalysts, and dive into what experts are saying about where BTC could go this power-packed week.

Key triggers for Bitcoin’s future price

Crypto markets are likely to remain volatile as they await election results, but history shows a pattern: Bitcoin has risen after every US election since 2009.

While short-term reactions vary, historical data shows that BTC’s election day price has never been revisited, with peaks typically occurring within a year.

Given that Bitcoin remains undervalued compared to previous cycles (up only a modest 7% since the last halving), some analysts argue that a long-term rally could be possible and possibly reach new highs if the election triggers sustained interest.

Beyond the election, other key data points will shape Bitcoin’s path this week.

Initial unemployment claims data, which will provide insights into the US labor market, are expected on November 7. Claims last week fell to 216,000, down from 228,000 the previous week, but forecasts for this week point to a slight increase of 220,000.

Higher jobless claims may indicate a softening labor market that could reduce consumer spending and traditional investments in stocks and bonds.

This scenario could increase Bitcoin’s appeal as an alternative investment, especially for those looking to hedge against economic fluctuations.

The Federal Open Market Committee meeting on November 6-7 adds a new layer to expectations. The Fed’s focus on balancing inflation and employment has kept the market guessing about interest rate cuts, and expectations are high.

While the Fed reduced interest rates by 50 basis points (0.5%) in its last meeting, inflation decreased to 2.4%, approaching the 2% target.

However, unemployment rose from 3.7% to 4.1% this year, indicating potential difficulties in the labor market.

Economists predict another rate cut is likely, with CME’s FedWatch tool showing a 99.9% probability of a 25 basis point cut.

The Fed’s interest rate cut could be a bullish signal for Bitcoin. Lower rates reduce the appeal of traditional savings and investments, shifting interest towards risky assets like BTC.

ETF inflows and liquidations paint a mixed picture

Bitcoin is giving mixed signals as we get closer to the US elections. October 2024 ended with BTC posting a modest gain of 10.76%, which was significantly lower than its impressive 28.52% rise in October 2023; This implies that investors are proceeding cautiously and are likely waiting for more clarity on the election results.

In the last 24 hours until November 4, there were significant liquidations in the market and a total position of 193 million dollars was deleted.

A closer look shows that $101 million in long positions and $91 million in short positions have been liquidated; This suggests that an unusual balance between bullish and bearish bets is being forced out of the market.

However, Bitcoin bore the brunt of these liquidations and took a hit of over $52 million; this figure was split between $21.05 million in long liquidations and $30.48 million in short liquidations; This suggests that despite some optimism, bearish forces are still actively pushing against BTC’s bullish momentum.

In addition to this cautious mood, spot Bitcoin ETFs, which saw enthusiastic inflows throughout most of October, experienced their first outflow on November 1, following a series of steady inflows that began on October 23.

October 29 and 30 in particular saw massive inflows of $827 million and $896 million respectively, signaling strong initial demand for BTC ETFs.

However, the recent breakout could signal short-term profit-taking as investors wait for clues from the elections and the Fed meeting.

Is Bitcoin heading for a big move after the election?

While Bitcoin remains at a critical level, the coming days could be crucial for the next big price change.

Some traders, such as Daan Crypto Trades, believe that Bitcoin is poised for a major rise. According to Daan, “There is a high probability that the price will see at least a 10% move in either direction, depending on who wins the election.”

#Bitcoin This isn’t the cleanest looking weekly candle of the week, but with what’s to come I don’t think that matters in any way.

I think there’s a good chance the price will see at least a 10% move in either direction depending on who wins the election this week. pic.twitter.com/OMvGCpr3Ba

— Daan Crypto Trading (@DaanCrypto) November 3, 2024

On the macro landscape, the economy is showing signs of strain, with last week’s employment data reported as the worst in three years. This softening in the labor market has led some, such as Michaël van de Poppe, to predict that we could soon see the beginning of a “only boom season,” especially if the Fed decides to implement further interest rate cuts.

This is the big week!

Elections and the FED.

Last week was the worst jobs data in 3 years; so I literally assume the new season is approaching.#Bitcoin He tested the green area for support.

It’s hard to tell which way we’re moving, expecting more volatility to come. pic.twitter.com/9pAWzdcZ8F

— Michaël van de Poppe (@CryptoMichNL) 4 November 2024

He warns that “more volatility” is likely as Bitcoin recently tests key support, indicating more turbulence but potential buying opportunities if prices decline.

Meanwhile, Spot On Chain points out that historically the real bull run for Bitcoin usually starts after the elections, regardless of the winning side.

The market is entering its most volatile week with the US elections and the FOMC meeting, but this rise may be permanent.

Historically the real bull run starts after the election and we, whether the next president is Trump or Harris, $BTC will continue its rise… pic.twitter.com/7cvCo8QxGK

— Spot On Chain (@spotonchain) 4 November 2024

Their perspective suggests that “Whether Trump or Harris becomes the next president, BTC will continue its upward journey” and may even reach the $100,000 level soon.

In fact, if Republicans win both the presidency and Congress, Standard Chartered analysts predict Bitcoin could even reach $125,000; This scenario would mark a historic peak for the crypto market.

However, it is very important to be cautious in the face of this optimistic forecast. Despite bullish predictions, the current market environment remains fragile, with macroeconomic headwinds that could slow Bitcoin’s rise.

Mixed economic signals, election results and Fed policy changes will likely determine Bitcoin’s path. Potential gains come with equal risks, and while the long-term outlook looks promising, the short-term road can be challenging.

As always, careful and clear risk management is vital in supporting the market against significant changes. Trade wisely and never invest more than you can afford to lose.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.