As the United States embarks on its election season, the intersection of Bitcoin and the broader cryptocurrency market with politics is more evident than ever before. Prominent figures such as former President Donald Trump have publicly endorsed cryptocurrencies, while Vice President Kamala Harris has adopted a more cautious stance. This political context has stimulated debates on how election results might impact the crypto environment.
QCP Capital, a renowned trading firm, recently divulged its projections regarding the anticipated impact of the elections on Bitcoin’s performance. In a report released on November 2, QCP hypothesized that the elections could catalyze a “sell-the-news” response, irrespective of the victorious candidates. They drew analogies to the Nashville Bitcoin conference, implying that a substantial number of investors may liquidate their Bitcoin holdings post the elections on November 5.
Additionally, QCP highlighted an elevated level of short-term implied volatility in both Bitcoin and Ethereum, signaling that market players are anticipating significant price swings in the near future. The current volatility stands above 72, mirroring investor nervousness about potential market movements.
READ MORE:
Tether’s USDT Witnesses Rising Popularity in Sanctioned Nations
Furthermore, the firm observed a surge in put skews, indicating that traders are seeking downside protection anticipating a market correction. This trend coincides with their expectation of a sell-off akin to the one observed post the Nashville conference.
Bitcoin, after nearly touching its all-time high recently, has experienced a fall, trading around $68,150—a drop of 2.2% over the past day. In a related development, on-chain analyst Ali Martinez reported that the majority of Bitcoin futures traders on Binance have pivoted their positions to long, with 52.44% now wagering on price rises. This shift suggests that investors might be assuming a more optimistic stance ahead of the elections, potentially capitalizing on recent price declines as an opportune entry point.