Bitcoin’s price is garnering attention from investors and analysts alike. With the election set to feature a high-stakes contest between Donald Trump and Kamala Harris, there’s growing speculation about whether Bitcoin could hit a new all-time high before the November polls. Recent on-chain data and technical analysis provide intriguing insights into Bitcoin’s potential trajectory in the coming months.
On August 5, Bitcoin experienced a significant dip, reaching a six-month low of around $49,500. This drop occurred during a broader global market rout and may have marked a local bottom for the cryptocurrency. Historically, Bitcoin has often found its local low in the third quarter of US election years, typically around July or August.
Technical analyst SuperBro notes that Bitcoin’s price patterns during previous election years—specifically 2012, 2016, and 2020—show that Bitcoin tended to experience a bottom in the third quarter followed by strong upward momentum. After these lows, Bitcoin often rallied to new record highs in the aftermath of the presidential elections.
Given these historical precedents, there’s a growing belief that Bitcoin could resume its upward trend as the November election approaches. SuperBro has highlighted a theory known as the “left-translated cycle” theory. This theory suggests that Bitcoin’s bullish cycles may be starting earlier and peaking sooner than in previous cycles.
One key piece of evidence supporting this theory is Bitcoin’s recent peak occurring a month before its fourth halving event in April 2024. In past cycles, Bitcoin’s peak typically followed the halving event. If the left-translated cycle theory holds true, Bitcoin might reach new highs before the election, potentially catching off guard those who are slower to adapt to changing market conditions.
Political factors could also play a role in Bitcoin’s price movements. Donald Trump’s favorable stance on Bitcoin and potential regulatory changes under different administrations might fuel speculative buying. The crypto betting service Polymarket has noted improved odds for Trump’s victory, which could influence market sentiment and drive Bitcoin’s price higher.
Recent on-chain data provides additional insights into Bitcoin’s market dynamics. According to Glassnode, long-term holders (LTHs) of Bitcoin have been consistently locking in about $138 million in profit per day during recent periods of price stability. This steady profit-taking indicates significant capital entering the market daily, which helps absorb selling pressure and keeps Bitcoin’s price relatively stable despite market fluctuations.
The Realized Profit/Loss Ratio, which measures the ratio of realized profits to losses, remains elevated but shows signs of decline from its peak. Historically, this metric tends to reach high levels during market tops and decreases before a new uptrend begins. The current trend suggests that LTHs may be reducing their profit-taking activities, which could set the stage for a potential rally.
From a technical perspective, Bitcoin is currently exhibiting a bull flag pattern. This formation, which has been developing since March, involves a strong uptrend followed by a correction within a descending parallel channel. The bull flag pattern is generally considered a bullish continuation signal.
According to the technical analysis, if Bitcoin’s price breaks decisively above the upper trendline of the bull flag, it could indicate a continuation of the bullish momentum. The target for this potential bull flag breakout would be determined by adding the height of the previous uptrend to the breakout point. This analysis suggests that Bitcoin could potentially reach new heights if the current pattern continues.
The combination of historical patterns, political factors, on-chain data, and technical analysis paints a complex but optimistic picture for Bitcoin’s price leading up to the 2024 US election. If Bitcoin follows the historical trend of rallying after finding a third-quarter low, coupled with the potential bullish implications of the left-translated cycle theory, the cryptocurrency could indeed reach new record highs in the near future.
Moreover, political developments and favorable regulatory changes could further fuel Bitcoin’s price growth. The current technical indicators, including the bull flag pattern, support the possibility of continued bullish momentum.
As the November 2024 US presidential election approaches, Bitcoin’s price potential is under close scrutiny. Historical trends suggest that Bitcoin could hit new record highs following a third-quarter low, and technical indicators are pointing to a possible continuation of the bullish trend. Political factors and market sentiment also play crucial roles in shaping Bitcoin’s price outlook.
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x200294f120Cd883DE8f565a5D0C9a1EE4FB1b4E9
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