Bitcoin BTC’s recent journey has been marked by sharp ups and downs, capturing the eyes of traders and analysts alike.
With the US election right at the corner, all eyes are now on how Bitcoin will react. While volatility peaked recently, an eerie calm has settled, leaving market participants on edge.
Bitcoin’s Volatility Takes a Breather Amid Election Tensions
After hitting a three-month high, Bitcoin’s volatility has stabilized, hinting at growing caution among traders.
According to a November 5 report by Bitfinex, “implied volatility for Bitcoin options remains in the low 40s.” This number signals a pause in major price swings as traders anticipate the election’s outcome.
Analysts at Bitfinex described this moment as the “calm before the storm,” highlighting the market’s uneasy stillness.
The volatility index from crypto derivatives platform Deribit reached 65.7 on November 3. However, it fell to 63.2 in subsequent days, showing that expectations for sharp movements have waned.
Additionally, CoinGlass data revealed the plunge in Bitcoin’s open interest as traders closed significant long and short positions ahead of the election results.
Moreover, Bitfinex analysts noted, “Despite a general expectation for heightened volatility leading up to the day of the US elections on November 5, many market participants seem hesitant to take action, adopting a wait-and-see approach.”
Despite this lull, a surge in volatility is anticipated after the election, possibly driving dramatic price shifts. The Bitfinex report said a massive spike in volatility could “fuel big moves” or, if absent, signal “a much deeper correction for Bitcoin on the lower timeframes.”
Other market analysts align with this outlook, with one trader predicting “potential swings of at least 10% in either direction after election results are announced.”
Altcoin Markets Signal Indifference as Bitcoin Dominates
The focus on Bitcoin has sidelined altcoins, given the new cycle high of over 60% in BTC dominance on October 29. This metric indicates that capital flow has concentrated on Bitcoin, causing altcoins to suffer.
The Bitfinex report emphasized a wave of “apathy” in altcoin markets. It pointed out that major assets like Ether and Solana experienced 12% pullbacks from their highs.
Bitfinex analysts observed, “The speculative interest that once supported altcoins seems to have vanished, birthing stable funding rates and muted overall market sentiment.”
Ether, for instance, has fallen 40% since its ETF rally.
The report hinted that “without a fresh catalyst, their prospects for a comeback in the near term appear slim.”
Is Bitcoin’s Resilience Signaling an Eventful Week?
Bitcoin has shown resilience since its September low, reflecting cautious optimism among traders.
Bitfinex noted, “Bitcoin’s overall resilience since its September low is noteworthy.”
This steady hold suggests that the market is preparing for potential volatility, especially with the election outcome at stake. Bitfinex’s analysts maintain that the next few days could prove critical, potentially ushering in significant price movements or revealing deeper market trends.
Will Bitcoin’s steady course break under the weight of post-election volatility? The coming days promise a dramatic narrative in the crypto market.
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