Bitcoin’s price has slipped 2% just ahead of the highly anticipated 2024 U.S. presidential election, trading around $67,848 as of early Tuesday. This dip is largely attributed to whale sell offs and cash outflows from U.S. spot Bitcoin ETFs, marking a temporary setback for the leading cryptocurrency. However, despite the drop, Bitcoin is holding a crucial support level and remains on a bullish path in the long term.

With the presidential race between Donald Trump and Kamala Harris heating up, investors are watching the crypto market closely, speculating whether Bitcoin could reach new highs. Historically, the U.S. elections have influenced Bitcoin’s volatility, often resulting in short-term fluctuations followed by a resurgence. Let’s dive into the factors behind Bitcoin’s recent price movement and explore what the next 24 hours may hold.

Why Did Bitcoin’s Price Drop?

Bitcoin’s recent price decline has been driven by significant whale activity. Large investors, or “whales,” have been selling off their Bitcoin holdings, creating downward pressure on the price. Data from major exchanges indicates that the first net cash outflow was registered from U.S. spot Bitcoin ETFs after a week of substantial inflows, totaling over $2.2 billion.

On Monday, one of the leading Bitcoin ETFs, Fidelity’s FBTC, reported a cash outflow exceeding $579 million. This sudden shift in cash flow has contributed to Bitcoin’s dip, with the cryptocurrency’s Fear and Greed Index showing a slight pullback from 77 to 70. Despite the drop, the index remains in “greed” territory, reflecting investors’ continued optimism.

Technical Analysis: Bullish Patterns Despite Market Correction

From a technical perspective, Bitcoin’s long-term outlook remains positive. Over the past few months, Bitcoin has displayed an upward trend, characterized by higher highs and higher lows on the daily chart. This pattern is often seen as a signal of a bullish market trend.

Currently, Bitcoin’s price is testing a key support level, slightly above its July peak. Should this level hold, it could serve as a strong foundation for a potential rebound, especially with market anticipation around the election outcome. Analysts are eyeing the 1.618 and 2.618 Fibonacci extension levels, which suggest a possible target range of $78,000 to $84,000 in the near term, assuming a bullish resurgence.

Election Day Volatility: What’s Happening with Bitcoin and U.S. Politics?

Historically, U.S. presidential elections have introduced heightened volatility into the cryptocurrency market, with Bitcoin often experiencing price fluctuations around election events. In 2020, for example, Bitcoin’s price saw considerable swings during the election period, followed by a strong upward trend that eventually led to new all-time highs. This year, Bitcoin has been a more significant part of the political conversation, with discussions surrounding regulation, taxes, and the future of crypto in America.

The outcome of the election could influence Bitcoin’s trajectory. While some in the crypto community support Donald Trump, others view Kamala Harris as a potential advocate for more balanced regulation. Regardless of who wins, the market expects some degree of short-term fluctuation, with most analysts predicting a return to a bullish trend afterward.

Short-Term Price Projections: Could Bitcoin Surge After the Election?

If Bitcoin’s current support level holds through the election, analysts see a realistic chance for a price rebound. Short-term projections place Bitcoin’s potential target range between $78,000 and $84,000, based on the daily Fibonacci extension indicators. This level is achievable if the election outcome instills renewed confidence among investors, particularly if the winner appears favorable to the crypto industry.

For the moment, several factors point toward a possible bullish reversal:

1. Strong Support Level: Bitcoin is holding above a key support level, suggesting it may rebound if the selling pressure eases.
2. Investor Sentiment: Despite the slight dip, the Fear and Greed Index shows that investors remain generally optimistic.
3. Historical Trends: During previous U.S. elections, Bitcoin has exhibited volatility, often followed by a strong price recovery.

Market Sentiment: What Are Investors Watching?

While the broader crypto community remains optimistic, much of the focus is on the U.S. spot Bitcoin ETF market. With cash outflows from ETFs like Fidelity’s FBTC signaling temporary caution, investors are closely watching institutional sentiment and ETF flows for signs of future market direction.

Additionally, sentiment within the crypto community seems divided along political lines. Many Bitcoin supporters favor Trump, largely due to his pro-business stance, which some believe could translate to more favorable crypto policies. Conversely, Harris supporters argue that her administration may support balanced regulations that foster innovation while protecting investors.

Expert Opinions: Bullish Sentiment Expected to Continue

Wall Street analysts remain confident about Bitcoin’s long-term outlook, regardless of who wins the election. Bitcoin’s increasing acceptance as a digital asset class, combined with its unique position as a hedge against traditional markets, has solidified its place among institutional investors. As a result, many experts believe that Bitcoin’s price will continue on a bullish path in the months following the election.

For instance, Alex Thorn, Head of Research at Galaxy Digital, recently suggested that Bitcoin could benefit from any regulatory clarity resulting from the election. “If we see a clear regulatory framework emerge from this election, it would be a game-changer for Bitcoin,” he explained, adding that such a development could attract further institutional investment.

Final Thoughts: Is a New All-Time High on the Horizon?

With Bitcoin’s price currently near a crucial support level, the next 24 hours could be pivotal. If the market finds stability and the election results bring positive news for crypto, Bitcoin could see a rally toward the $78,000-$84,000 range. However, if volatility increases and support fails, the cryptocurrency may temporarily drop before finding new levels of support.

Investors should stay alert to news surrounding election results and any significant policy details affecting the crypto market. Given Bitcoin’s historical behavior around U.S. elections, a post-election rally could still be on the horizon, especially if institutional interest remains strong.

As the U.S. decides its next president, the potential for Bitcoin to reach a new all-time high remains, depending on both investor sentiment and policy outcomes. The coming days will reveal whether the cryptocurrency market can continue its upward momentum—or if more volatility lies ahead.