Bitcoin traders and investors are bracing for heightened volatility. Experts believe that Bitcoin’s price could fluctuate by at least 10% in response to the election results, signaling significant movement in either direction. Bitcoin volatility recently reached a three-month high, adding to the growing anticipation among investors.

Bitcoin Volatility on the Rise

On Nov. 3, Bitcoin’s volatility index surged, reaching levels not seen in three months, as reported by the crypto derivatives platform Deribit. This spike in volatility reflects heightened uncertainty in the market, with traders reacting to various economic and geopolitical factors, including the upcoming U.S. election. Historically, high volatility in the cryptocurrency market has often been linked to substantial price shifts, as investors speculate on potential outcomes.

Analyst Predictions: 10% Move in Either Direction

Pseudonymous crypto analyst Daan Crypto Trades, who has a significant following on social media, suggested that Bitcoin could see a 10% swing depending on the election’s outcome. In a post to his 389,000 followers on X (formerly Twitter), Daan noted that while Bitcoin’s weekly close didn’t seem ideal, the election’s impact could override these technical indicators.

Daan’s sentiment is echoed by other market analysts who foresee either a potential rally or retreat in Bitcoin prices, depending on who secures the presidency. This prediction underscores the growing belief that the election will serve as a critical trigger for the cryptocurrency market.

Key Levels to Watch: $65,000 Support and $74,000 Resistance

According to Tony Sycamore, an analyst at IG Markets, Bitcoin is at a pivotal point. In a recent investment note, Sycamore emphasized that Bitcoin would need to break above its resistance level at $74,000 to confirm a bullish trend. This could potentially set the stage for Bitcoin to test new highs, with $80,000 as the next target.

However, Sycamore also cautioned that a drop below the $65,000 support level could reverse last week’s rally. Should Bitcoin break below this threshold, it may fall back into a downward trend channel that has persisted over the past seven months. For traders, this means that the $65,000 and $74,000 levels could be critical indicators of Bitcoin’s next direction.

How the Election Could Impact Bitcoin

The U.S. presidential election has already generated considerable buzz within the crypto community. The two major candidates, former President Donald Trump and Vice President Kamala Harris, present contrasting views on cryptocurrencies and the broader digital asset space. While crypto enthusiasts generally view Trump as a more crypto-friendly candidate, Harris’s stance has been relatively muted.

Trump’s Pro-Crypto Stance

Trump has vocalized his support for fostering innovation in the U.S. crypto industry, promising to protect and encourage digital assets if re-elected. This stance has garnered positive reactions from the crypto community, which sees Trump’s potential policies as a boon for digital assets in the short term. Many traders speculate that a Trump victory could lead to a Bitcoin rally, as his pro-crypto stance aligns with the broader sentiment of the industry.

Harris’s Approach to Digital Assets

Vice President Kamala Harris, on the other hand, has been less vocal about cryptocurrency until recently. In a brief statement on Sept. 22, she indicated her administration would consider encouraging investments in both artificial intelligence and digital assets. While Harris’s policies on digital assets remain less defined, her approach might lean toward broader technology development rather than specific cryptocurrency initiatives.

Beyond the Election: The Federal Reserve’s Role

In addition to the election, investors are closely monitoring the U.S. Federal Reserve’s monetary policy. Following a recent 50-basis-point rate cut in September, the Fed is expected to continue its campaign of reducing interest rates. Lower interest rates make traditional investment options like term deposits less attractive, which could drive more investors to riskier assets such as cryptocurrencies.

Historically, interest rate cuts have provided a boost to crypto assets as investors seek higher returns. A favorable environment for digital assets could encourage further investment in Bitcoin, especially if the Federal Reserve continues down this path. Analysts believe that a post-election rate cut could add momentum to Bitcoin’s price, regardless of who wins the election.

Positive Market Sentiment Ahead of the Election

Despite the uncertainty surrounding the election, overall sentiment in the Bitcoin market has leaned bullish in recent weeks. Analysts point to a broader trend of risk appetite among investors, with several positive tailwinds for Bitcoin, including anticipation of favorable regulatory developments and the Fed’s accommodative stance.

Bitcoin’s recent rally, which saw the asset touch highs near $74,649 on Oct. 29, is a testament to this optimistic outlook. Although the rally was met with selling pressure due to election-related concerns, many market participants remain confident that Bitcoin could retest these highs after the election dust settles.

What’s Next for Bitcoin?

As the election draws closer, crypto investors should prepare for potential volatility. Analysts advise traders to keep a close watch on key price levels and stay informed about election-related developments, as both could influence Bitcoin’s next move. A decisive outcome in the election and clarity around the Fed’s monetary policy could provide the direction Bitcoin needs to break out of its current range.

In summary, Bitcoin could be gearing up for a significant 10% move, depending on the outcome of the U.S. presidential election. While a Trump victory might signal short-term gains for Bitcoin due to his favorable stance on digital assets, a Harris win could lead to a more cautious approach in the crypto sector. Meanwhile, the Federal Reserve’s ongoing rate cuts could create a supportive environment for Bitcoin, encouraging investors to stay engaged in the market.