Bitcoin Shows Strong Fundamentals, Follows Patterns Seen in Previous Elections – CryptoQuant

While crypto investors are still on the sidelines due to the just-concluded US presidential election, CryptoQuant analysts say Bitcoin is showing strong fundamentals and following a bullish pattern seen in previous US elections .

According to a weekly report, a fundamental positive from a valuation perspective is that BTC is currently fairly valued and not overvalued. This means that a positive catalyst from the election could lead to a significant rally in the asset’s price.

Bitcoin fundamentals are strong

After the last three US presidential elections in 2012, 2016 and 2020, BTC increased by 22%, 37% and 98% from election days to the end of each year. So far in 2024, BTC has recorded a similar performance. The crypto asset has already surpassed its all-time high (ATH) of $73,750 to reach a new high of $76,450. At press time, BTC was above $74,500, according to data from CoinMarketCap.

A few hours before the election results were announced, BTC was worth roughly $67,000, just above its realized price, the average price paid for all current holders. This was evidence that BTC was fairly valued and the situation was seen before the last elections in 2016 and 2020.

Interestingly, the apparent demand for Bitcoin is growing at the rate seen before the last election. In 2016, demand for BTC declined until the last week of November, when it experienced a strong recovery. Instead, demand grew strongly in 2020 and remained so until the end of the year. For 2024, the metric has been positive since late September and is now rising to 248,000 BTC monthly, the fastest since April 21st. This type of growth often precedes significant concentrations.

Investors still watching the market

CryptoQuant further noted that BTC’s fall over the weekend was not related to traders shorting the asset, but to market participants taking profits following the cryptocurrency’s 20% rise in in October Profit-taking removed about $4 billion of leverage from the Bitcoin futures market.

As the market waits for a post-election catalyst to shake things up significantly, BTC traders appear to be exerting less selling pressure, as seen in fewer assets moving to centralized exchanges.

During the last presidential election, daily inflows of BTC to exchanges were around 73,000 BTC. When BTC hit a new high earlier this year, the figure was around 95,000 BTC; however, inflows have dropped to 45,000 BTC currently. This shows that investors are still watching the market, an indication corroborated by Coinbase’s premium in negative territory.

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