According to ChainCatcher's message, Bitfinex has released a report stating that after 8 months of volatility, Bit nearly broke its all-time high last week, but then experienced a violent pullback. We believe that this rebound was initially driven by the "Trump trade" narrative, but was subsequently affected by the uncertainty over the outcome of the US presidential election tomorrow. This lack of confidence is also reflected in the Bit options market.
As election day approaches, the market generally believes that a Republican victory would be favorable for Bit, while the prospect of a Democratic victory appears more uncertain. The average odds of a Trump victory have fallen from 64.9% to 56%. In the options market, implied volatility on near-term contracts has been unusually subdued ahead of the election. This calm in volatility suggests that investors are in a wait-and-see mode, waiting for the situation to become clearer. However, it is expected that volatility will surge between November 5th and 8th, which could trigger significant market fluctuations; if no volatility occurs, it may indicate deeper caution in the market.
The Altcoin market has also seen a downturn, with Bit's market dominance exceeding 60%, reaching a new cycle high. Whenever Bit pulls back, Altcoins face severe declines. Ethereum and SOL have both fallen around 12% from their recent highs, and Ethereum has fallen 40% since its initial ETF rebound. The speculative interest that once supported Altcoins seems to have disappeared, as reflected in stable funding rates and an overall gloomy market sentiment. With Bit absorbing most of the inflows into crypto assets, Altcoins struggle to keep up, lacking new catalysts, and their prospects for a short-term recovery appear slim.
Even in last week's pullback, Bit's overall resilience since its September lows is worth noting. In summary, the current market dynamics suggest that the coming week will be very eventful. Whether you are a trader, investor, or casual observer, the path to election day is sure to be anything but uneventful.
