As the United States undergoes its presidential election, Bitcoin (BTC) is mirroring the anticipated volatility typically associated with such major political events. On Tuesday, the largest cryptocurrency oscillated between $68,000 and $70,000, with the latter level serving as a resistance point since the preceding Saturday.
A recent analysis from Crypto Birb, a prominent market research firm, delves into the potential effects of the election on Bitcoin’s price path. According to current indicators, the firm suggests Bitcoin has the potential to achieve new record highs surpassing $73,700 in the days following the election.
Prospects of Bitcoin Surpassing $263,000
In a recent social media update, Crypto Birb drew attention to several critical figures for traders and investors. Notably, the rising trends in the 200-week and 50-week simple moving averages (SMAs), currently positioned at $59,200 and $40,700, respectively, indicate a bullish long-term forecast for Bitcoin’s price.
The firm’s analysis also highlights over $470 billion in volume from exchange-traded funds (ETFs) investing in BTC. This substantial market liquidity is crucial for Bitcoin’s potential upward price movements.
Market Considerations and Potential Challenges
Despite the optimism, a market bloat of 51%, as measured by the Net Unrealized Profit/Loss (NUPL), suggests that a significant number of Bitcoin holders are in profit. This scenario could lead to increased selling pressure if prices rise too swiftly.
Moreover, the Market Value to Realized Value (MVRV-Z Ratio), currently at 1.86, indicates a potential price target exceeding $263,000, suggesting a significant growth opportunity. Bitcoin’s low correlation of 0.16 with the S&P 500 further underscores its independence from traditional equity markets, potentially attracting investors looking for diversification.
Anticipating a Robust November: Historical Insights
Despite the bullish long-term outlook, Crypto Birb advises traders to be wary of short-term volatility. The firm notes that the market is currently experiencing a surge in “price randomness,” a common occurrence during election periods.
Key resistance levels have been identified at $70,700 and $72,000, which could play a pivotal role in determining Bitcoin’s immediate direction. The daily trend analysis reveals that $70,000 is a critical breakout point. A successful breach of this level could trigger further upward momentum, potentially retesting all-time high records.
The current sentiment in the crypto market is characterized by a “Fear and Greed” index reading of 70, indicating a prevalent state of greed among investors. While this sentiment often leads to increased buying activity, it can also signal a potential pullback if prices rise too rapidly. Furthermore, mining costs are estimated at approximately $80,700, suggesting that miners could operate at a loss if Bitcoin remains below this threshold.
Promising Historical Performance in November
Adding strength to Bitcoin’s case, historical data demonstrates that November has traditionally been a robust month for BTC, with an average gain of 14.96% over the past nine years. Should the cryptocurrency follow these past trends, it could reach $79,000 by the month’s end.
In addition to this, the fourth quarter of previous years has shown an average gain of 50.86%, with the maximum quarterly gain recorded at an impressive 470.44%. This suggests that BTC is positioned for a substantial rally in the coming weeks, regardless of the US election results between Donald Trump and Kamala Harris.
As of the time of writing, Bitcoin, the largest cryptocurrency by market capitalization, was trading at $69,830, reflecting a 3% increase over the last 24 hours.
