On November 6, Bitcoin reached a new record high, surpassing $73,800, as traders anxiously awaited the results of the US presidential election.
At the open in New York, Bitcoin initially showed strength, rising more than 3% to reach a high for the day of $70,577 as "election-related volatility" increased in the cryptocurrency market.
At the time of publication, Bitcoin was trading at $74,957 and had touched $75,000, according to data from TradingView source.
Throughout much of 2024, traders have expressed a positive outlook on the price potential of Bitcoin if Republican presidential candidate Donald Trump wins, and throughout the year, Republican and Democratic candidates have shifted their policy positions on regulation in the cryptocurrency industry.
On November 5, Bitcoin analyst Tuur Demeester suggested that election news favorable to Trump is also linked to Bitcoin price increases.
Bitcoin price is closely tracking the US election. Every time there's good news for Trump, the price goes up. pic.twitter.com/mMgifTaBWx
— Tuur Demeester (@TuurDemeester) November 5, 2024
Is Bitcoin price linked to Trump's winning chances?
Bitcoin price appears to be closely tied to Trump's winning probability on the decentralized prediction market Polymarket.
On November 5, Bitcoin price rebounded above $70,000 as Trump's predicted winning probability surpassed 60%, while Harris' fell below 39%.
Trump's winning probability reaches 80% on Polymarket. Source: Polymarket
Bitcoin price volatility expected to continue after US election
Despite reaching an all-time high, traders predict Bitcoin price will remain volatile, and changes in market participant positioning reflect this perception.
On November 4, a rare day of strong outflows from Bitcoin ETFs was witnessed. Total outflows reached $541.1 million as funds like Fidelity, ArkInvest, Bitwise, Grayscale, and GBTC all saw heavy selling. Meanwhile, BlackRock's IBIT had $38.3 million in inflows.
Bitcoin ETF flows (in million USD). Source: Farside Investors
A series of protective measures have also been observed in the Bitcoin options market, a point that has been thoroughly discussed by Tony Stewart, founder of Pelion Capital.
Yesterday, the largest single trade we've seen in a while was the purchase of 70K Call options expiring on November 29th on CME - with a notional value of $250 million, a premium of $14.3 million, and adding to an existing position worth $125 million in just that one option.
CME also added a similar (but lower premium) trade into the 85K Call option expiring on November 29th, and... https://t.co/csZwVcwhnG
— Tony Stewart (@PelionCap) November 5, 2024
Providing a bit of commentary and translation for Stewart's views, Marcel Pechman, options analyst at TinTucBitcoin, said,
"Traders are generally more bullish, especially for November 7, November 15, and November 29. Most of the new bets have been placed at the $72,000 to $75,000 or higher price levels. The notable purchase of $64,000 put options suggests some concerns, and market makers may face higher risks if Bitcoin declines, as they have sold put options at lower prices."
