Key Points
- Hedge funds maintain a bullish outlook on Bitcoin (BTC) despite market caution due to the US election.
- Deribit data indicates traders anticipate a prolonged election outcome, with large funds preparing for potential price swings.
Despite the uncertainty surrounding the US election, hedge fund sentiment towards Bitcoin (BTC) remains largely bullish.
Last week, Bitcoin’s price surged past $73K, fueled by strong demand for BTC ETFs and increased odds of a Trump victory. However, the election week brought a different scenario, with Kamala Harris closing in on Trump’s odds on Polymarket and reaching near parity on Kalshi, another prediction site.
Large Funds Target $70k-$85k for Bitcoin
Despite the close race, hedge funds maintained a bullish stance, albeit with precautions in place for any market direction. Deribit data revealed significant call buying (betting on price upside) for $70K-$85K targets by November. Large funds also placed massive bids on straddles, anticipating substantial price volatility around election day. These funds bought both calls and puts to safeguard against potential price swings.
However, traders seemed to shift their focus from 8th November option expiries to 29th November, indicating an expected delay in the election outcome, likely due to controversies or rigging claims.
This cautious short-term stance perhaps contributed to the recent de-risking observed in the spot market towards the end of the last week. Bitcoin’s price dropped from a high of $73.6K to below $68K, with some analysts predicting a further drop, citing historical patterns around election day.
Market Sentiment Amid Election Uncertainty
Crypto trader Eugene Ng Ah Sio advised avoiding the markets until the election outcome is known. This cautious approach was echoed by crypto trading firm QCP Capital, warning that the election outcome could trigger a sell-the-news event.
Despite the uncertainty, investor Mike Alfred suggested this might be the last week to buy Bitcoin below $70K. He noted that Bitcoin has historically reached a low price during the week of the US election that has never been revisited.
On the price charts, $65K remained a crucial level should the pullback extend lower. However, the positioning of large funds indicated a potential recovery for Bitcoin, regardless of the election outcome’s uncertainty.
