The United States election season is in full swing, and the cryptocurrency industry, particularly Bitcoin, is playing a significant role in the political landscape. From former President Donald Trump’s favorable stance to Vice President Kamala Harris’s more reserved position, there has been a noticeable interplay between the crypto market and U.S. politics.
As discussions abound regarding the election outcome and its potential impact on the cryptocurrency landscape, QCP Capital, a well-known trading firm, has shared its insights on how the election results may affect Bitcoin specifically.
In a report released on November 2, QCP Capital predicted that regardless of the election outcome, there would likely be a “sell-the-news” reaction in the market. Similar to the Nashville Bitcoin conference, the firm anticipates that many investors will close their Bitcoin positions following the election on Tuesday, November 5.
The report also highlighted a sustained level of short-term implied volatility above 72 vols for both Bitcoin and Ethereum leading up to the elections. Short-term implied volatility reflects the market’s expectations of price movements in the near future. With this metric currently at 72 vols, it suggests that investors are bracing for significant price swings in the Bitcoin and Ethereum markets post-election. Moreover, the increase in put skews indicates that traders are expecting downward price movements, reinforcing the “sell-the-news” narrative.
Following a near all-time high price in the previous week, Bitcoin experienced a notable pullback below $70,000, standing at around $68,150 as of the report, marking a 2.2% decline in the past 24 hours.
Meanwhile, on Binance, traders in Bitcoin futures have started to close their short positions, with 52.44% now going long on the flagship cryptocurrency. This surge in long positions signals that more investors are optimistic about the Bitcoin price rising in the near future. It represents a significant shift in sentiment, with the market leaning towards a more bullish outlook just days before the U.S. elections.
This change in Binance traders’ positions could be a response to recent dips in the Bitcoin price, with investors potentially viewing the current price as a good entry point. The sentiment is reflected in a chart showing the price of BTC on the daily timeframe.
In conclusion, as the U.S. election unfolds, the cryptocurrency market, particularly Bitcoin, is expected to see significant fluctuations. The “sell-the-news” sentiment prevails among traders, with many anticipating market corrections post-election. However, the surge in long positions on Binance suggests a growing optimism in the market, with investors potentially seeing the current price levels as favorable for future gains. As the political landscape continues to evolve, so too will the dynamics between cryptocurrencies and traditional markets.
