Huge Volatility Seen

Bitcoin traders are bracing for fireworks this week as US voters prepare to take to the polls tomorrow.  According to CF Benchmarks, 30-day implied volatility in BTC has hit its highest level since the global market crash in August. The options market is also pointing to expectations of an 8% move tomorrow in either direction, compared with just 2% on a typical day.

Harris/Trump Skew

Bitcoin has emerged as one of the leading ‘Trump trade’ assets over recent months given Trump’s commitment to embracing the crypto sector. The former president has promised to unwind the regulatory crackdown launched by Biden with crypto traders speculating on a fresh bull phase should Trump get re-elected tomorrow. This view has help drive BTC higher over the last month. As a result, the clear risk tomorrow is that if Harris wins, BTC is likely to be sharply sold near-term as speculators exit positions.

Institutional Flows

Additionally, record levels of institutional inflow are adding to volatility risks this week. BTC ETFs saw their second largest net monthly inflows in October since they began trading this year. If Harris wins, we’re likely to see heavy outflows near-term, sending BTC and the wider crypto market firmly lower. While the longer-term outlook remains bullish and should see BTC recovering by year end, near-term trading would certainly be hampered by a Harris win.

Bull View

For bulls, clearly the best outcome this week would be for Trump to get re-elected. If seen, BTC is likely to break out to fresh record highs this wee and stay supported through coming months.

Technical Views

BTC

The rally in BTC has stalled for now into a retest of the all-time highs around 74,355. Price has corrected lower and is testing support at 69,355 for now. While is level holds, focus is on a break higher and a continuation to new highs. Below here, 65,025 and 60,695 will be the next support levels to watch.