Bitcoin Could Rally to $80,000 on the Eve of US Elections

Bitcoin has experienced wild price fluctuations since Vice President Kamala Harris announced her candidacy for the US Presidential election in July 2024.

The largest cryptocurrency attempted to test its all-time high of $73,738 on October 29, 2024, but failed. Investors expect higher volatility closer to and after the elections. Crypto prediction markets like Polymarket and Kalshi provide insight into crypto investors’ views.

Polymarket sees approximately $3.21 billion in trading volume as participants bet on the winner of the November election. Harris’ opponent, former US President Donald Trump, is a clear favorite with 61.1% betting in his favor at Polymarket.

Presidential Election Winner 2024 bets on Polymarket | Source: Polymarket.com

Kalshi, a prediction market regulated by the U.S. Commodity Futures Trading Commission, places Trump’s odds of winning at 56.8% to Harris’s at 43.2%. The betting contract attracted $234.98 million as of November 5, 2024.

Kalshi’s “Who Will Win the Presidential Election?” Themed Betting Agreement | Source: Kalshi.com

The effectiveness of betting markets in predicting the winner of the election remains controversial, but it sheds light on sentiment among crypto traders.

Trump has garnered the support of crypto investors with his pro-crypto approach to regulation and his speech at the Nashville Bitcoin Conference. The former US President shared plans for a national Bitcoin reserve and proposed making the US the world leader in BTC mining. The former President’s plan is for the US to hold 100% of Bitcoin.

Harris’ “Opportunity Agenda for Black Men,” a proposal that mirrors the Vice President’s stance on crypto, hints at a measured approach to the asset class, though many details are omitted.

US markets will not be open late Tuesday due to state voting, but cryptocurrency is a major exception and a Trump win could push Bitcoin closer to the $80,000 level, according to data from BTC derivatives markets.

Derivative data points to a range of 60 thousand to 80 thousand dollars

Deribit’s Bitcoin Volatility Index shows a consistent increase in volatility since September 26, 2024, but the metric has failed to see a major move like the one recorded during President Joe Biden’s exit from the Presidential election in July and the correction of US markets in August.

Bitcoin Volatility Index (DVOL) | Source: Deribit Metrics

In the weeks following the election, data from the Deribit exchange highlights the $60,000 to $80,000 range that garnered the highest open interest, or outstanding futures contracts, for both bullish and bearish investors bets.

Open interest based on strike price | Source: Deribit Exchange

Farside Investors’ Bitcoin Spot Exchange Traded Fund inflow data shows a net outflow of $541.10 million on November 4. This marks the second consecutive day that institutional investors have withdrawn capital from the asset, possibly preparing for post-election volatility.

Combining data from the prediction market and Farside Investors’ BTC ETF flows shows that institutional investors expressed their confidence in Bitcoin and increased their capital flows when the probability of Trump winning was almost 67% on October 30. There was a net inflow of 893.3 million dollars on the same day.

Spot Bitcoin ETF flows | Source: Farside Investors

In March, Bitcoin (BTC) reached an all-time high of $73,738 in response to massive capital inflows into US-based Spot Bitcoin ETFs. As of this writing, Tuesday, November 5, Bitcoin was hovering around $69,000, 10% away from its all-time high.

Technical analysis: Bitcoin eyes turn to new ATH

Major events since July 2024 have helped the price fluctuations observed in Bitcoin. The BTC/USDT daily chart from TradingView shows BTC attempting to test a new all-time high after Harris announced his crypto proposal.

Derivatives data highlights the importance of the $60,000 to $80,000 range for Bitcoin price. The asset has traded in this range throughout events since July, except for a drop to $49,000 on August 5.

BTC is in a short-term uptrend starting August 5, and the token could extend its gains by making higher highs and higher lows after the election eve. Bitcoin’s previous all-time high of $73,738 is a significant resistance and a successful breach of this level could push BTC closer to the $80,000 target.

BTC/USDT daily price chart | Source: TradingView.com Bitcoin’s value still remains low ahead of election

Crypto.news spoke to experts to get information about the Bitcoin price.

“As the US Elections take place today, many believe that the crypto price will be immediately impacted by the winning candidate because they have different stances on the future of digital assets, and Trump has historically been more inclusive of digital assets than Harris. While this may be true in the short term, traders should also consider that the crypto price moves beyond what the party directly supports and becomes more dependent on the policies they will implement around inflation, global political discourse, and the availability of investment opportunities in the digital environment. space of existence.”

BingX spokesperson

The BingX manager believes that the current cycle is one of the worst performing cycles post-Bitcoin halving, leading to the belief that BTC is still undervalued.

“If we look at other market sentiment indicators, we see crypto-related stocks climbing, with MicroStrategy and Robinhood surging in the month before today’s election. “The digital asset community in general should expect the price of digital assets to increase based on historical indicators alone.”

“If the selected candidate supports crypto, this can increase the confidence of the market; if not, it may create some uncertainty. Uncertainty regarding the election outcome can trigger market volatility. “Investors need to closely follow election developments and market reactions and be prepared to manage risks accordingly.”

Ryan Lee, Principal Analyst at Bitget Research

“Politics is a secondary factor, and historical analysis shows that one or two primary catalysts typically drive bull markets.” Thielen explains how ridiculous this would be: “Assuming that while Fed Chairman Bernanke was maintaining low interest rates in 2011, your neighbor suddenly decided to use Bitcoin to buy contraband on the Silk Road exchange,” meaning looking for a direct correlation between election results and Bitcoin price reaction may be less than ideal.

Markus Thielen, CEO of 10x Research

The manager argues that the main driver of the Bitcoin rally is institutional adoption of BTC, triggered by BlackRock’s Spot BTC ETF application earlier this year.

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