Anxiety is palpable in the market as Election Day unfolds in the United States. Despite Bitcoin’s recent retreat from its nearly record-breaking high to $68k, the Crypto Fear and Greed Index continues to signal “Greed,” with a current reading of 70.
Optimism persists among Bitcoin investors
Notably, the decline in U.S. Spot BTC ETFs on Monday did not deter Bitcoin investors. These products experienced total net outflows of $541 million, primarily driven by 21Shares (ARKB) and Bitwise’s BITB.
Spot On Chain reported that Monday witnessed the second-largest outflow for these products, coinciding with a broader risk-averse sentiment in U.S. equities ahead of Election Day.
The confidence observed in the BTC and crypto markets could be attributed, in part, to Trump leading in prediction sites and top election models.
However, QCP Capital, a crypto trading firm, issued a warning that the market may not be fully considering the risks following the election, including the likelihood of Harris’s victory.
In a statement on the election, the firm mentioned,
“The current crypto market expectation is a +/-3.5% movement in BTC spot price on the election night. Nonetheless, traders might be undervaluing the post-election risks: the lack of volatility premium post-November 8 suggests anticipation of a swift resolution, potentially underestimating possible delays or disputed outcomes.”
The firm anticipated erratic price fluctuations in BTC as election results unfold. Amberdata forecasted potential swings of $6k-$8k in either direction.
It further suggested that a Harris victory could drive BTC towards $60k, whereas a win for Trump might propel BTC to a new all-time high of $75k/$77k.
Despite these predictions, the Options market indicated a preference for bullish outcomes over the weekend, with upside targets ranging from $70k to $85k.
Deribit’s latest data highlighted targets of $72k to $75k in off-shore markets, based on significant call buying from European and Asian markets. An excerpt from their update stated,
“Increased T-1 Option flows have elevated the IV. APAC-Euro flow: 1.5k Nov 72+75k Calls purchased. As BTC reached 69.3k at the U.S. open, Nov29 60k Puts were acquired x1k, financed by Nov29 80k Calls, and Nov15 64k Puts purchased 1.5k.”
Moreover, the rise in interest for put options targeting $60k mirrored Amberdata’s projections in the event of a Harris victory.
Regardless of the election outcome, Option traders anticipate BTC’s value to remain above $60k. The $65k level will serve as a critical point to monitor should the decline persist.