Key Points
- Bitcoin’s recent price drop could be a short-term correction, mirroring historical patterns around election times.
- Post-election periods have often marked the beginning of bull runs for Bitcoin.
Bitcoin experienced a significant decrease in its recent gains in the week leading up to the U.S Election Night.
It was observed that historical patterns indicated a potential bull rally on the charts.
Bitcoin’s Price Fluctuation
After almost reaching its all-time high [ATH] at $73,600, Bitcoin [BTC] experienced a downturn, dropping to a low of $67,459 on 3 November.
This decline has raised questions about whether this signifies the return of the bear market or if it’s merely a short-term correction.
To address these queries, a detailed examination of BTC’s historical data was conducted. It revealed that the price drop might be the latter. For instance, in 2016, the cryptocurrency depreciated by 10% just days before the election.
Similarly, in 2020, Bitcoin’s value dropped by 6.2%. BTC’s ongoing decline seems to be mirroring these past patterns, with Bitcoin losing over 8% of its value since the aforementioned high.
Election-Driven Uncertainty
Quinten Francois, Co-founder of WeRate, shared a similar perspective. He explained that the period of heightened unpredictability before elections directly impacts investor sentiment.
The Founder of CryptoSea, also known as Crypto Rover, supported this viewpoint by stating, “Bitcoin always dumps right before the U.S. elections.”
It’s important to note that at press time, the cryptocurrency had recovered to trade just under $69,000 on the charts.
Bitcoin’s Future Outlook
With the dip’s cause seemingly rooted in the uncertainty surrounding the upcoming elections, the pressing question is – What comes next for the king coin?
Well, previous patterns dictate that post-election periods have marked the beginning of bull runs that extend well into the following year.
In 2016, Bitcoin gained by approximately 60% two months after the election.
Additionally, an approximate gain of 150% was recorded after the presidential elections in 2020.
So, if history repeats itself, BTC could hit a new ATH in the upcoming months.
A strong cluster of liquidity was formed around $74,000. This magnetic zone could attract the price, marking a new ATH for the king coin.
Altcoin Outlook
While a Bitcoin bull run seems likely regardless of the election outcome, the outlook for altcoins varies. A Donald Trump win could mean a more favorable environment for altcoins due to potentially relaxed crypto regulations from the Republican administration.
Clearer SEC guidelines on which altcoins qualify as securities could also trigger bull runs for the assets.
Also, as Bitcoin investors redistribute profits after elections, some altcoins could see gains. Nonetheless, the likelihood of a lasting “altcoin season” remains uncertain at the moment.
