Bitcoin fell to $75,700 before buyers pushed it higher again. Around election time, prices sat in the mid-to-high $70,000s. That level is about 38% below the prior cycle high. Meanwhile, the coin set its yearly low near $58,000 in early July. Anyone who opens a Bitcoin price chartwill see a sharp dip and a fast recovery.

Bitcoin Has a Rough Record Before Midterms

Past midterms offer a guide, though a small one. Let’s look at time periods spanning 2014, 2018 and 2022. They set 2010 aside because Bitcoin traded below $0.20 with almost no volume.

In each of those years, Bitcoin entered the vote deep in a bear market. It sat 67% to 73% below its prior high. The coin fell about 43% in the 90 days before the 2014 vote and 23% before 2022.

Full-year returns hurt too. Bitcoin lost roughly 56% in 2014, 73% in 2018 and 64% in 2022. Analysts blame Bitcoin’s four-year cycle for these drops, not politics.

Election Day Brings Mixed Moves

Election day itself rarely sets a trend. In 2018, Bitcoin stayed within about 2% either way. In 2022, however, the price fell sharply as the FTX crisis unfolded.

Political worries can add short-term swings. Still, crypto-specific news has driven the bigger moves. After the votes, the short-term picture looked weak. Bitcoin lost about 13.5% on average after 30 days. For example, the 2018 low arrived 39 days after the vote, down 51% from the election close. But the long view shines. One year later, Bitcoin had gained 23% to 24% in 2014, 45% in 2018 and 92% to 93% in 2022. The average gain was about 54%.

Traders Bet Big on a Rebound

The options market showed strong optimism this week. Block trading hit $660 million on election day, more than double the previous day’s volume. Traders bought roughly $420 million in call options, which pay off when prices rise. In contrast, they sold only about $105 million in put options.

Leverage fueled the swings. When Bitcoin dropped to $75,700, forced selling hit traders who had borrowed to buy. Then the price reversed, and short sellers rushed to close their bets. That rush pushed prices up faster. The Relative Strength Index also told a story. It fell to an extreme 13 before it bounced back.

What Comes Next for the Price

Analysts see hurdles ahead. Bitfinex flagged $81,300 as a major resistance zone. Many investors bought above today’s price, so some may sell once they break even. Demand from spot markets remains soft. US spot Bitcoin ETFs saw about $1.16 billion in net outflows over three trading sessions.

Wintermute says Bitcoin must reclaim and hold $80,000 first. Strong spot buying and ETF inflows could then lift it toward $81,300 to $82,000. Otherwise, the coin may retest $77,000 or fall back to $75,700.

This cycle also looks different. The yearly low came in July, not after the vote. That breaks the old pattern of bottoms shortly after midterms. Past results do not guarantee future gains. Bitcoin’s market is now larger and more institutional than in earlier cycles.

Disclaimer

The views, opinions, and investment recommendations expressed by investment experts, analysts, brokers, financial institutions, rating agencies, or other contributors on Trade Brains are their own and do not necessarily reflect those of the website or its management. Investing and trading in stocks, cryptocurrencies, mutual funds, and other financial products involve market risks, including the risk of substantial financial loss. Readers and investors should conduct their own research and exercise due diligence before making any investment or trading decisions. Trade Brains and/or the author shall not be held responsible or liable for any losses arising from decisions based on the information, analysis, or opinions presented in this article. Please consult a SEBI-registered investment advisor or other qualified financial professional before making investment decisions.

Disclaimer

The views, opinions, and investment recommendations expressed by investment experts, analysts, brokers, financial institutions, rating agencies, or other contributors on Trade Brains are their own and do not necessarily reflect those of the website or its management. Investing and trading in stocks, cryptocurrencies, mutual funds, and other financial products involve market risks, including the risk of substantial financial loss. Readers and investors should conduct their own research and exercise due diligence before making any investment or trading decisions. Trade Brains and/or the author shall not be held responsible or liable for any losses arising from decisions based on the information, analysis, or opinions presented in this article. Please consult a SEBI-registered investment advisor or other qualified financial professional before making investment decisions.