Bitcoin recently neared its all-time high of $73,600 before retracing to $67,459 on November 3rd. The sudden dip has sparked discussions about whether this indicates the return of a bear market or is just a temporary adjustment.
Reasons behind Bitcoin’s Decline
Exploring Bitcoin’s historical data, it appears that the current price drop may be a short-term correction rather than a sign of a bear market. Similar patterns were observed in both 2016 and 2020 when Bitcoin saw declines just before the elections.
In line with this observation, the cryptocurrency has lost over 8% of its value since reaching the recent high.
The Influence of Election-Driven Uncertainty
Quinten Francois, Co-founder of WeRate, emphasized the impact of pre-election uncertainty on investor sentiment, stating, “Financial markets are wary of uncertainty, and with looming elections, it’s no surprise that $BTC is experiencing a downturn.”
Crypto Rover, Founder of CryptoSea, supported this sentiment by noting the historical trend of Bitcoin dipping before U.S. elections.
Despite the recent drop, Bitcoin has shown signs of recovery, currently trading just below $69,000.
Future Prospects for Bitcoin
Given the current uncertainty surrounding the elections, many are pondering Bitcoin’s next moves. Past election cycles have often heralded the beginning of bullish trends that extended well into the following year.
Following the 2016 election, Bitcoin surged by around 60% within two months. Similarly, in 2020, a substantial gain of approximately 150% was witnessed post elections.
If history repeats itself, Bitcoin could potentially reach a new all-time high in the coming months.
Moreover, an analysis of Coinglass’s 1-year liquidation heatmap hints at the likelihood of further highs, with a significant liquidity cluster forming around $74,000, suggesting a potential push towards a new ATH.
Altcoin Performance Post-Election – Trump vs. Harris Victory
While Bitcoin appears poised for a potential bull run post-election, the outlook for altcoins remains uncertain. Speculations suggest that a victory for Donald Trump might create a more conducive environment for altcoins, possibly due to relaxed crypto regulations under a Republican administration.
Altcoins could also benefit from clearer SEC guidelines on securities classification, potentially triggering their own bull runs. However, the sustainability of an “altcoin season” post-election remains uncertain.