Run to fresh US presidential election results

• Bitcoin is up more than 2% this week through Friday after flirting with a new all-time high and then correcting.
• Bitcoin could experience a pullback ahead of Tuesday’s US presidential election, a key event for its short-, medium- and long-term price outlook.
• U.S. spot Bitcoin ETFs saw inflows of more than $2.2 billion through Thursday despite increased profit-taking activity.

Bitcoin (BTC) Up Over 2% this week by Friday, in a stellar first half of the week that saw BTC within touching distance of a new all-time high, followed by a significant price drop amid increasing signs of profit-taking.

Bitcoin could experience a price drop in the coming days ahead of the US presidential election, analysts say, an event that will be key to determining if and how the crypto class will be regulated in the years to come. A continuation of BTC’s recent short-term rally is largely dependent on the outcome of the election, with traders increasingly convinced that a victory by former President Donald Trump would lead to more favorable crypto regulation.

Bitcoin Rise and Fall: What Driven the Performance This Week?

After retesting and returning to a crucial support level last week, Bitcoin bulls regained control this week, with BTC up 2.85% on Monday. This upward momentum was reflected in continued growth in institutional demand across US spot Bitcoin ETFs, which kept pace as the week progressed.

Bitcoin Spot ETF Total Net Flow Chart. Source: Coinglass

Bitcoin continued its rally on Tuesday, rising 3.97% to hit a high of $73,620, approaching its all-time high of $73,777 since mid-March. This bullish momentum was supported by futures Open Interest (OI) on exchanges hitting a new all-time high of $42.23 billion, according to CoinGlass data, indicating that new capital is entering the market and fueling new buying activity.

U.S. spot ETFs saw another sizable gain of $827 million on Tuesday, the third-biggest single-day flow since their launch in January.

Bitcoin Futures Open Interest Chart. Source: Coinglass

With BTC nearing new highs, some signs of profit-taking have emerged from both the big and small players.

According to Arkham Intelligence, crypto the wallets belonging to the Government of Bhutan transferred USD 66.55 million in BTC to Binance. This move suggests a potential strategy to leverage its mined Bitcoin for fiscal or broader operational plans in light of recent halving pressures and fluctuating mining yields. If Bhutan decides to sell this BTC on exchanges, it could create selling pressure and lead to a drop in Bitcoin prices, considering that the country currently holds $889.36 million in Bitcoin.

Additionally, Santiment’s Net Realized Profit/Loss (NPL) indicator showed positive growth on Tuesday, rising from 590.2 million to 1.39 billion in one day. This increase indicates that holders were, on average, taking profits, a move that could also increase selling pressure.

Profit/loss graph made on the Bitcoin network. Source: Sentiment

Bitcoin fell 3.36% from Wednesday to Thursday, hitting a low of $69,695, even as U.S. spot Bitcoin ETFs continued to see strong inflows, posting inflows of more than $2.22 billion through Thursday.

Some market watchers have attributed crypto’s decline to crypto-friendly candidate Donald Trump’s declining chances of victory. At Polymarket, Trump’s odds of winning fell to 61% from 67% just 48 hours earlier, while the odds for Democrat Kamala Harris rose from 33% to 39%.

“There is a risk that the pre-election position will pull back, meaning we are more likely to be below $73,000 than above on Election Day,” Kendrick wrote in a Thursday note.

He said Bitcoin prices would move more significantly if Republicans win a majority in the US Congress, adding that this could push the digital asset to $125,000 by the end of the year and trigger a renewal. altcoin season. “We think a Republican review would be particularly helpful to Solana in this regard,” Kendrick added.

On Friday, Bitcoin continues its decline and is trading slightly lower around $69,500.

Friday’s Lookonchain data shows that the Mt.Gox wallet transferred 500 BTC, valued at $35.04 million. Traders should remain cautious about the move as this transfer could be sent to exchanges like Bitstamp, BitGo and Kraken for repayment to creditors.

If these funds are sold, it could generate fear, uncertainty and doubt (FUD) among traders, potentially contributing to a decline in the price of Bitcoin. The wallet currently holds 44,905 BTC worth $3.11 billion.

Bitcoin Technical Outlook: New ATH at $78,955 Depends on US Election Result

Bitcoin’s weekly chart shows that the largest crypto-asset by market cap has broken and successfully retested the breakout level of the descending parallel channel pattern around $65,800 last week. This week, it gained over 2%, hitting a high of $73,620 and later retreating to around $69,400.

If BTC continues to rise, the pattern’s technical target (obtained by measuring the distance between the two trend lines and extrapolating it higher) projects a new ATH of $78,955.

The Relative Strength Index (RSI) momentum indicator on the weekly chart is trading at 59, above its neutral level of 50 and still well below overbought conditions, suggesting bullish momentum is gaining traction.

BTC/USDT weekly chart

The daily chart is showing signs of the bulls running out, however, as Bitcoin continues to fall on Friday.

If BTC continues to decline and close below the $69,500 level, it could extend the decline by over 5% to retest the next key support level at $66,000, which closely aligns with the breakout level of the slope-parallel channel pattern downside around $65,800 seen on the weekly chart.

The Relative Strength Index (RSI) on the daily chart, which peaked at an overbought level of 70 on Tuesday, has fallen sharply to 57, signaling a significant weakening of bullish momentum and giving a sell signal by breaking out of overbought territory .

BTC/USDT Daily Chart

However, if Bitcoin it holds above the $69,500 level, it may try again to test and break the all-time high of $73,777.

Despite the technical outlook described above, the price of Bitcoin in the short term perspective will largely depend on the outcome of the US presidential election. The bullish momentum appears to be mainly fueled by a potential Donald Trump victory, which could lead to more favorable crypto regulations. The polls are tight and any variation in the results could bring volatility to the crypto markets.

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