Bitcoin, stocks drop as markets uncertain about US election result

Bitcoin, stocks drop as markets uncertain about US election result

The price of (BTC) suddenly fell by 3% within hours on Nov. 4 to $13,566 after briefly rising above $14,000. Coincidentally, the U.S. dollar, gold and stocks all fell together in tandem.

Analysts are pointing to uncertainty surrounding the election as the catalyst for the sharp correction.

When the mainstream media was actively reporting the vote count, the price of Bitcoin and stocks rallied. Yet, after the vote count ended for the day, all risk-on and risk-off assets went into the red, including S&P 500 futures.

Tracy Alloway, a financial journalist at Bloomberg and co-host of the Odd Lots podcast, said this was a likely outcome due to President Donald Trump’s statement. She said:

The recent drop of Bitcoin is noteworthy given that it dropped simultaneously with the dollar. Typically, when the dollar drops, Bitcoin and gold tend to rally, since both stores of value are priced against the dollar.

READ  Kadena Mainnet Goes Live, New $20 Token Sale Starts Tomorrow

As Cointelegraph reported, BTC saw a low correlation with other assets including stocks in recent weeks. As such, the collective correction among most major assets comes across as an unexpected market response.

According to data from CryptoQuant, the Estimated Leverage Ratio of Bitcoin futures on Binance hit an all-time high. This indicates that there are more traders in Binance’s BTC derivatives market than ever before.

Ki-Young Ju, the CEO of CryptoQuant, warned traders on Nov. 4 about heightened volatility caused by cascading liquidations. If there is an abnormally large number of contracts in the market, it can cause massive price movements.

In the short term, given the repeated rejection of BTC at $14,000, traders are leaning toward a market drop.

READ  Crypto banks are the sector’s game-changers

There are several key support levels in the foreseeable future for Bitcoin. First, the $13,300 area has been defended with strength over the past week. If BTC continues to hover above $13,300, it would indicate resilience from buyers.

Second, the $13,000 level has been supported with whale clusters since early November. This means whales have accumulated large amounts of BTC at that level, which makes it an area of interest for buyers.

Leave a Reply

Your email address will not be published. Required fields are marked *

Want to automate your crypto Trading?
Try this new trading Robot!

Your information will be validated and you will be automatically redirected to the trading robot advanced dashboard.