It’s the election season in the United Statesand Bitcoin and the broader cryptocurrency industry have never been more involved in the political landscape. From the openly friendly attitude of former President Donald Trump to the relatively reserved position of Vice President Kamala Harris, there has been quite a bit of drama in the interaction between the crypto market and American politics.
There have been numerous discussions about the outcome of the election and its potential impact on the crypto landscape. QCP Capital, a leading trading firm, is one of the latest to speak out about the poll results and the effect on cryptocurrencies, especially Bitcoin.
QCP thinks the price of Bitcoin will fall after the election results – here’s why
In a Nov. 2 report, QCP Capital says revealed that it expects the US elections to be another “sell-the-news” campaign, regardless of the outcome. Like the Bitcoin conference in Nashville, the trading company expects many investors to close their BTC positions after the elections on Tuesday, November 5.
According to QCP, there has been a sustained level of short-term implied volatility above 72 volatility for both Bitcoin and Ethereum in the upcoming elections. As the name suggests, short-term implied volatility follows the market’s expectations of price movements in the near future.
With this measure currently sitting at 72 vols, there is a sense that investors are expecting big price swings in the future. Bitcoin and Ethereum markets after the elections. However, an increase in puts causes most traders to anticipate downward price movements.
QCP emphasized that the rise in put skews indicates traders are taking “downside protection” in anticipation of a market correction. Ultimately, this is consistent with the sell-the-news projection, which reflects its aftermath Bitcoin Conference in Nashville.
After nearly reaching its all-time high price this past week, BTC has experienced a notable pullback below $70,000. At the time of writing, the leading cryptocurrency is trading at around $68,150, reflecting a decline of 2.2% in the past 24 hours.
Binance traders go long BTC futures
In a recent post on X, Ali Martinez revealed Bitcoin futures traders on Binance have started closing their short positions. According to the on-chain analyst, 52.44% of Binance futures traders have now gone long on the flagship cryptocurrency.
Source: Ali_charts/X
An increase in the number of long positions indicates that more investors support the Bitcoin price rise in the near future. This latest observation thus signals a significant shift in sentiment, with the market seemingly leaning towards a more bullish outlook a few days before the US elections.
It is worth noting that this change in Binance traders’ positions could be a response to the recent declines in the Bitcoin price. It is possible that investors “buy the dip”, with the current price being considered the perfect entry point.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView