What is the latest situation with Bitcoin and altcoins after the US midterm elections?
The US midterm elections, long awaited by Bitcoin and altcoin investors, have taken place, resulting in a victory for the Democrats. Having lost the presidency and a majority in both houses of Congress to the Republicans in the 2024 presidential election, the Democrats achieved a significant victory this time, shifting the political balance once again.
US Elections Shake the Cryptocurrency Market!
Following the initial results from the US midterm elections, Bitcoin faced selling pressure and fell below $76,000. Besides BTC, major altcoins, including Ethereum, also experienced declines.
The main reason for the decline is said to be the concern that, with the possibility of Democrats gaining control of both houses of Congress, crypto-friendly policies could face obstacles and slow down regulatory efforts.
In particular, delays in legislation related to cryptocurrencies and the possibility of stricter regulation of the sector are negatively affecting investor sentiment and prices.
The cryptocurrency market, which experienced a decline following the initial election results, has since recovered its losses. At this point, BTC has risen above $78,000, while the altcoin market has also turned green.
Reverse Signal Warning from Santiment!
Santiment, an on-chain data analytics platform, noted that investor sentiment in Bitcoin and altcoins has shifted significantly over the past two weeks. According to Santiment, on October 20th, bullish comments about BTC were approximately 1.8 times more numerous than bearish comments, but sentiment gradually decreased as prices fell.
Following the Binance hack, the bullish-worst ratio dropped to approximately 0.37. With the initial results from the US midterm elections, bearish predictions regained the upper hand.
At this point, Santiment noted that many individual investors viewed the Republican Party as crypto-friendly, and the election results increased selling pressure.
However, the firm also stressed that panic among investors does not always mean the decline will continue.
Santiment noted that this situation sometimes acts as a counterintuitive indicator, and therefore, a “buy the rumor, sell the fact” trend could occur in the days following the finalization of the by-election results.
He added that at this point, BTC rising back above $79,000 would be a strong signal that the market is starting to move against current negative expectations.
Analyst’s Possible Pullback Scenario for Bitcoin!
Market analyst Murphy, also known by his pseudonym Murphy, has outlined the levels to watch out for in the event of a potential pullback, based on Bitcoin’s past price movements between January and September 2023.
The analyst noted that in the past, BTC has encountered resistance above 1 standard deviation of the Short-Term Trader Realized Price (STH-RP) line, resulting in a pullback each time.
At this point, the analyst stated that, according to current indicators, the $75,700 level could be retested, and if the decline continues further, $72,300 could come into play.
He added that another level to watch out for, below one standard deviation, is 68.900.
*This is not investment advice.
