Hanging in suspense: Bitcoin price after the US election
The US Presidential election, how it affects financial markets and the bitcoin price, expected volatility and more.
There is a lot of speculation going on right now about the economic ramifications of the US presidential election and how it will affect the markets, stocks and crypto. As more liquidity enters the economy, it is expected that the US dollar will continue its decline. Dollars decreasing purchasing power could lead the alternative assets like gold and bitcoin higher. Similar to how it happened after the first of $2.2 trillion stimulus aid.
Such stimulus has always resulted in a bullish rally for the S&P 500. For example the 2009’s Recovery Act led to 170% growth in the next six years. The CARES Act that was signed in March this year caused the price to rise 43% within 5 months.
Looking at the previous bitcoin price behaviour after the elections, in 2012 when Obama became the president, bitcoin price went up over 9,000% in one year. In 2016 when Trump won the election Bitcoin price increased over 3,000%. And we have yet to see what will happen to bitcoin after this year’s elections. Regardless of the results traders and analytics expect a spike in volatility.
Cryptoasset Research Analyst from Messari, Ty Young says quote “On the bullish side for Bitcoin, central banks will continue to flood the world with money and stimulus packages, further setting the stage for BTC. On the bearish side, a contested election and a second wave of Covid-19 lockdowns could spell disaster for markets, dragging down BTC with it.”
The bitcoin price spiked 15% in the past three days, breaking out of the ascending channel. The Relative Strength Index reached an overbought territory. Technical indicators like a bearish divergence on a daily RSI seem to be overshadowed by the political news in the United States. For now the 23,6% Fibonacci Retreacemnt level is preventing the price go up higher. The upcoming correction might bring BTC back to the previous resistance level and turn it into support.