Written by: BitpushNews
As the US election enters the final stretch, the Federal Reserve's interest rate decision is about to be announced, and investor risk appetite has decreased significantly, with investors preparing for the expected volatility.
Data shows that the Deribit Bitcoin Volatility Index has reached its highest level since late July. Similarly, the MOVE index, which tracks the implied volatility of US Treasuries, rose to its highest level since October 2023 last Friday.
Fed Watch data shows that traders expect a 98% probability of a rate cut being announced at this week's Fed meeting, and Powell's post-meeting speech will also be a focus, as his remarks will directly impact market expectations of future monetary policy and could trigger market turmoil.
Bitpush data shows that Bitcoin hovered above $68,500 in the morning, but came under pressure and fell in the afternoon, reaching an intraday low of $66,803. As of the time of writing, the trading price is $67,807, a 24-hour decline of 1.44%.
The Altcoin market saw more declines than gains, with THOREChain (RUNE) falling 16%, Popcat (POPCAT) dropping 12.6%, and Ponke (PONKE) declining 12.3%.
The total market capitalization of cryptocurrencies is currently $2.21 trillion, with Bitcoin's market share at 59.41%.
US stocks closed lower, with the S&P 500, Dow Jones, and Nasdaq indices declining 0.27%, 0.60%, and 0.32% respectively.
The Bitcoin options market is showing a moderately optimistic sentiment
In the options market, QCP Capital reported that the purchase volume of $75,000 call options expiring at the end of November has increased, reflecting growing demand for upside risk exposure. Analysts noted that election-related options have also risen, with implied volatility soaring.
Coinglass data shows that the current BTC open interest is 582,000, unchanged from the previous week, but 10% higher than a month ago. This indicates that despite the recent uncertainty and price corrections, investors are still increasing their leveraged positions. Combining this with the data on top trader positions, it suggests that even after Bitcoin surged above $73,500 on October 29, there is still a moderate bullish sentiment, indicating that professional investors remain optimistic about Bitcoin's long-term prospects and are actively positioning themselves.
A V-shaped reversal after testing $66,000?
Chart analysts believe that Bitcoin has broken below the $68,500 level on the daily chart, and the next area worth watching is around $65,000-$66,000.
On-chain analyst Skew pointed out that in the recent bullish rebound, the Bitcoin market witnessed "persistent demand" around the $65,000-$66,000 area, which pushed the price above $70,000 at the end of October.
Analysts say that Binance platform data shows that the $66,000-$67,000 range has seen significant buying pressure, driving Bitcoin's price above $69,000. The high liquidity in this range suggests that market participants have strong support and resistance expectations at this level, and the future price movement may fluctuate around this range.
As shown in the image below, the $66,000-$67,000 range has acted as a key resistance level before being breached, so this critical area may support a V-shaped reversal in BTC after the US election results are announced.
Bitfinex analysts stated: "In the run-up to election day, the market believes a Republican victory would be positive for BTC, while a Democratic victory would make the outlook more uncertain. The average betting odds for a Trump victory have fallen from 64.9% to 56%."
They added: "While volatility is generally expected to increase in the run-up to the US election on November 5, many market participants seem unwilling to take action and are adopting a wait-and-see attitude. Even with last week's pullback, the overall rebound in BTC since the September lows is still worth noting. In short, the road to election day will be an exciting one for the cryptocurrency market, whether you are a trader, investor, or casual observer."
Swan Bitcoin CEO Kippsten also expects volatility to spike. He said: "The recent surge in the BTC price, which is nearing its all-time high, can be attributed to investors' optimism about the election, as both campaign teams are actively involved, and a large amount of capital is flowing into BTC ETFs. A Trump victory could lead to a short-term BTC price increase, potentially breaking through the $80,000 or $90,000 mark, and if Trump fulfills his BTC promises, this could accelerate the adoption of BTC by individuals, businesses, and even nation-states."
He added: "A Harris victory could lead to a more moderate reaction, with the BTC price potentially stabilizing or experiencing a more moderate increase in the short term. The Harris administration is still expected to have a positive attitude towards BTC and may establish a more legally and regulatory transparent friendly environment."
