With the upcoming Election Day in the United States approaching, various sectors have reacted in different ways. The cryptocurrency market has not been exempt from this phenomenon.
Indeed, due to these events, Bitcoin’s [BTC] price volatility has reached a peak not seen in the past three months. Therefore, the question arises – How will this impact the broader cryptocurrency market?
Impact of U.S Elections on the Cryptocurrency Market
Prior to the announcement of the U.S. election results, the cryptocurrency market experienced a rise in volatility. According to CryptoCrypto’s analysis, the overall volatility in the cryptocurrency market surged to 66.7 at the time of this report. As expected, Bitcoin led this shift in trend, with BTC’s volatility reaching a three-month high.
A notable observation is the emergence of a discernible pattern on the volatility chart. Specifically, this pattern first appeared in July and has since confined the volatility within its bounds.
Currently, BTC’s volatility is challenging the resistance level of this pattern, registering at 63.72. A breach above this resistance could signal heightened volatility following the election results.
In addition, CryptoCrypto’s findings also show a rise in liquidations within the cryptocurrency market.
Encouragingly, most of Bitcoin’s liquidations originated from long positions, which is considered a bullish indicator. The prevalence of long positions suggests a strong bullish sentiment prevailing across the market.
Will Increased BTC Volatility Propel its Value?
Given the escalating volatility of BTC, CryptoCrypto delved into the on-chain data of the flagship cryptocurrency to assess whether this development will yield profits for investors or subject them to losses. Analysis of CryptoQuant’s data revealed a decrease in BTC’s exchange reserves, indicating high buying pressure on the coin.
An increase in buying pressure typically leads to price surges. In the last 24 hours alone, BTC experienced a slight price increase and was trading at $68.75k.
However, not all factors favor Bitcoin’s price surge. BTC’s aSORP highlighted a growing number of investors selling at a profit, potentially signaling a market peak amidst a bullish trend.
Moreover, with the U.S. election buzz ongoing, investors seem hesitant to buy BTC, as evidenced by the negative Coinbase premium.
Conclusively, a review of BTC’s daily chart provided insights into the potential future scenarios. Based on our evaluation, BTC appeared to be testing a crucial support level.
The technical indicator MA Cross indicated a dominant bullish trend, signaling a successful trial. Consequently, if BTC’s volatility continues to rise, it may propel the price towards $73k once again.