Rush to all-time highs based on US presidential election results

• Bitcoin rose over 2% this week through Friday after flirting with an all-time high and then correcting.
• Bitcoin may experience a pullback ahead of the US presidential election on Tuesday, an important event for the price outlook in the short, medium and long term.
• U.S. spot Bitcoin ETFs reported inflows of over $2.2 billion through Thursday despite increased profit-taking activity.

Bitcoin (BTC) up over 2% this week Until Friday, a spectacular first half of the week saw BTC within touching distance of a new all-time high, followed by a significant price decline amid increasing take-profit signs.

Analysts say Bitcoin may experience a price drop in the next few days ahead of the US presidential election: An event that will play a key role in determining whether and how the crypto class will be regulated in the coming years.. The continuation of the recent rise in BTC in the short term largely depends on the election result; traders are increasingly convinced that a win for former President Donald Trump would lead to more positive crypto regulations.

Bitcoin’s rise and fall: What drove performance this week?

After retesting and bouncing back a key support level last week, Bitcoin bulls regained control this week, with BTC rising 2.85% on Monday. This upward momentum is also reflected in the continued increase in institutional demand through US Bitcoin spot ETFs, which continues unabated as the week progresses.

Total Bitcoin Spot ETF Net Inflow chart. Source: Coinglass

On Tuesday, Bitcoin continued its rally, rising 3.97% to $73,620 and approaching $73,777, its all-time high since mid-March. This bullish momentum was supported by futures Open Interest (OI) on exchanges reaching an all-time high of $42.23 billion, according to CoinGlass data; This shows that new capital has entered the market and triggered new purchasing activities.

US spot ETFs saw another big gain of $827 million on Tuesday; this was the third largest single-day entry since their launch in January.

Bitcoin Futures Open Interest chart. Source: Coinglass

As BTC nearly reached new highs, some profit-taking signs emerged from players both large and small.

Crypto according to Arkham Intelligence wallets A company owned by the Government of Bhutan transferred $66.55 million worth of BTC to Binance. This move suggests a potential strategy to use the Bitcoin they mine for broader financial or operational plans, in light of recent halving pressures and fluctuating mining outputs. If Bhutan decides to sell this BTC on exchanges, it could create selling pressure and lead to a decline in Bitcoin prices, considering the country currently holds $889.36 million worth of Bitcoin.

Additionally, Santiment’s Network Realized Profit/Loss (NPL) indicator showed a positive increase on Tuesday, rising from 590.2 million to 1.39 billion on the day. This increase indicates that shareholders are making profits on average, a move that could increase selling pressure.

Bitcoin Network Realized Profit/Loss table. Source: Santiment

From Wednesday to Thursday, Bitcoin fell 3.36% to $69,695, as US spot Bitcoin ETFs continued to record strong inflows, registering over $2.22 billion in inflows through Thursday.

Some market observers attributed the collapse in crypto to the diminishing chances of crypto-friendly candidate Donald Trump winning. At Polymarket, Trump’s chances of winning dropped to 61% from 67% just 48 hours ago, while Democrat Kamala Harris’s chances of winning increased from 33% to 39%.

“There is a risk that the position will unwind before the election, meaning we are more likely to be below $73,000 rather than higher come election day,” Kendrick wrote in a note on Thursday.

He said Bitcoin prices would move more significantly if Republicans win the majority in the US Congress, adding that this could see the digital asset reach $125,000 by the end of the year, leading to a renewed rally. altcoin season. “We think a sweep of Republicans would be particularly helpful to Solana in that regard,” Kendrick added.

Bitcoin continues its decline on Friday and is trading slightly lower near $69,500.

Lookonchain data on Friday shows that the defunct exchange Mt.Gox wallet transferred 500 BTC worth $35.04 million. Investors need to be careful about this move, as this transfer may be sent to exchanges such as Bitstamp, BitGo, and Kraken to repay creditors.

Selling these funds could potentially contribute to a decline in Bitcoin price by creating fear, uncertainty and doubt (FUD) among investors. The wallet currently contains 44,905 BTC worth $3.11 billion.

Bitcoin technical outlook: New ATH of $78,955 depends on US election results

Bitcoin’s weekly chart shows that the largest crypto asset by market cap broke and successfully retested the breakout level of the downward sloping parallel channel pattern near $65,800 last week. It rose over 2% this week, reaching $73,620 before falling to $69,400.

If BTC continues to rise, the model’s technical target (obtained by measuring the distance between two trend lines and predicting higher) predicts a new ATH of $78,955.

The Relative Strength Index (RSI) momentum indicator on the weekly chart is trading at 59, above its neutral level of 50 and still well below overbought conditions, indicating bullish momentum is gaining momentum.

BTC/USDT weekly chart

However, the daily chart shows signs that the bulls are exhausted as Bitcoin continues to fall on Friday.

If BTC continues to decline and closes below the $69,500 level, it could extend its decline by over 5 percent and retest the next key support level at $66,000. weekly chart.

The Relative Strength Index (RSI) on the daily chart, which peaked at an overbought level of 70 on Tuesday, has since fallen sharply to 57, signaling a significant weakening in bullish momentum and breaking out of the overbought zone, signaling a sell signal.

BTC/USDT daily chart

But if Bitcoin If it holds above the $69,500 level, it could try to retest and surpass the all-time high of $73,777.

Despite the technical outlook described above, Bitcoin’s short-term price appearance It will largely depend on the outcome of the US presidential election. The bullish momentum appears to be driven mainly by a potential Donald Trump win, which could lead to more positive crypto regulations. The polls are tight and any change in the results could cause volatility in the crypto markets.

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