From October 31 to November 4, the BTC price fell by 6.7%, breaking below $67,500 for the first time in eight days. This round of correction led to the liquidation of over $190 million in leveraged long positions, and the US presidential election on November 5 also increased market uncertainty. Although the crypto market has a bearish trend in the short term, the exchange's long-short ratio, the total open interest of futures, and the demand for stablecoins in the Chinese market indicate that the crypto market sentiment remains bullish. Even after BTC price fell below $67,500 on November 4, their spot and futures positions remained stable, indicating that BTC whales and investors are confident in the recovery of BTC price. Although investors generally hold an optimistic attitude towards BTC, they remain cautious about whether it can break through the key resistance level of $70,000. Some analysts warn that a victory for Harris and the Democrats could subject the crypto market to more regulatory scrutiny, limiting the integration of cryptocurrencies with traditional finance.
The US election may bring more turmoil to the crypto market
A well-known crypto trader said that Harris's ambiguous stance brings a lot of uncertainty to the crypto market, which is even worse than clear opposition. Even if her final policy is beneficial to the crypto industry after her successful election, it is unlikely to be as promising as Trump's previous promises. Trump had hinted that he would fire the SEC chairman on his first day as US president, although his BTC adoption plan was also unclear, and the market lacked confidence in the speed of changes in the US government and the Treasury Department. Therefore, regardless of the outcome of the US presidential election, investors believe that the momentum for BTC to hit new highs is very limited. The main reason for the difference in expectations for the US presidential election is the traditional market's focus on central bank digital currencies and tokenized assets, which, although using blockchain technology and being digital representations of real-world assets, have completely different and unrelated logics to BTC. Therefore, their impact on crypto assets or BTC is very weak. To determine whether crypto traders are reducing their exposure, it is necessary to analyze the total open interest of BTC futures, and a significant drop in this indicator, regardless of market sentiment, indicates that investors are hesitant about investing in the industry. The current open interest is 582,000 contracts, flat from the previous week, 10% higher than the level on October 4, indicating that despite the recent uncertainty, investors are still increasing their leveraged positions. Combined with the long-short data of top traders, it reflects that even after BTC broke through the $73,500 high on October 29, the market still has a moderate bullish sentiment. In China, crypto traders have also shown strong resilience, with the trading price of USDT close to its fair value. Historically, this indicates that traders remain optimistic about the continuation of the bull market after the US election.
