As a seasoned crypto investor who has weathered numerous market storms, I can confidently say that the upcoming US Presidential election and FOMC interest rate decision have me on high alert. With historical trends pointing towards increased volatility, I’m bracing myself for a rollercoaster ride this week.
As a crypto investor, I’m finding myself in a pivotal moment, my gaze fixed on two significant upcoming events: the US Presidential Election 2024 and the FOMC interest rate decision. This week is shaping up to be particularly tumultuous, with market insiders preparing for high volatility. The experts’ predictions align with this anticipation, drawing from historical trends.
Will the Crypto Market Crash On US Election Day?
Based on a recent analysis by The Kobeissi Letter about the X platform, the financial market is expected to experience significant volatility in trading, regardless of who wins the U.S. election. Meanwhile, investors in the cryptocurrency market seem to be holding back, waiting for more insight into the future direction of the market.
Remarkably, cryptocurrency is a significant topic during the 2024 U.S. Presidential Election. Both Donald Trump and Kamala Harris have expressed support for Bitcoin and the crypto market, with Trump being vocal about it before the election, while Harris has shown strong interest in technology-related matters.
Additionally, following the U.S. presidential election, Bitcoin and leading alternative cryptocurrencies have displayed strong growth. Given this trend, there’s an expectation in the market for another positive performance this year, possibly resulting in Bitcoin reaching a new all-time high after the upcoming election.
US Election & Its Impact On The Crypto Market
In more straightforward terms, the world of politics in the United States has been linked closely to the crypto market lately. Recently, Donald Trump voiced his support for Bitcoin, which has sparked a surge of interest among politicians regarding digital currencies. Experts believe that this could lead to significant growth in the crypto industry following the election.
In the meantime, the outcome of the U.S. election could signal future guidelines on crypto market regulations. Notably, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have distinct strategies regarding digital asset regulation. Moreover, the SEC, under Chair Gary Gensler, has encountered significant criticism from the cryptocurrency community, with many accusing the agency of excessive regulatory intervention.
Currently, investors are focusing their attention on the upcoming election. Notably, they hope for a new administration that will encourage innovation in digital assets. Additionally, investors anticipate that both parties, particularly Democrats, may share this stance if Kamala Harris wins.
Earlier, it was made public that Donald Trump, a previous U.S. President, had expressed his intention to dismiss Gary Gensler on his inauguration day at the White House. This declaration has ignited considerable enthusiasm among crypto market investors, who view Gensler as an adversary of cryptocurrencies due to his perceived regulatory stance.
On the contrary, traders are equally enthusiastic about Donald Trump’s promise to incorporate Bitcoin into the U.S. strategic reserve. If this plan comes to fruition, it could potentially boost Bitcoin’s price in the near future. Moreover, his open advocacy for the digital assets sector and self-proclaimed title of “Crypto President” has sparked optimism among investors.
How US Election Impact the Stock Market?
As a researcher delving into the intricacies of financial markets, I’ve recently come across an insightful analysis shared by the Kobeissi Letter regarding the election and stock market trends. Given the recent synchronization between the crypto market and stocks, I find it pertinent to examine this analysis and assess its potential implications for digital assets.
In the lead-up to the election, experts are carefully examining how it might influence both traditional stock markets and cryptocurrencies. The Kobeissi Letter has found intriguing variations in stock market returns prior to and following Election Day, a trend that can be traced back to 1920.
Here are some of the important findings from the analysis:
- Election Year Trends: 83% of election years saw positive returns leading up to Election Day, while only 67% had positive returns afterward.
- Stock Performance: Stocks perform 4.2% better on average in the six months preceding an election compared to non-election years, but 1.4% worse in the six months following.
- Economic Influence: The economy plays a crucial role in election outcomes, with only one instance of an incumbent party winning during a recession year since 1948.
- Market Volatility: Elevated volatility is expected regardless of the election outcome, with the VIX index up 65% year-to-date.
Historically speaking, the S&P 500 has typically delivered around a 11.3% return during election years since 1928, and about 83% of these years have seen positive performance. Given that the crypto market often follows the same trends as stocks, investors are preparing for possible ups and downs. The recent increase in gold prices and the rise of the VIX index suggest that traders could be in for a lucrative journey amidst the prevailing uncertainty.
What’s Next For Bitcoin And Altcoins?
In the run-up to the upcoming election, Bitcoin is predicted to experience significant fluctuations in its trading value. Similarly, it’s anticipated that other major cryptocurrencies will mirror these trends. At present, the price of Bitcoin has hovered around $69,000, reaching as high as $73,577.21 within the past week.
As a crypto investor, I’ve been keeping an eye on the latest Matrixport report, and here’s what caught my attention: as we get closer to the US presidential election, Bitcoin seems to be holding its ground, remaining neutral in the market. The 21-day Relative Strength Index (RSI) for Bitcoin has dipped to 56%, which is below the usual overbought threshold of 70%. This indicates that Bitcoin isn’t either oversold or overbought at the moment, creating a potential opportunity for those looking to sell volatility.
Following U.S. Presidential elections, Bitcoin’s performance has often mirrored that of the S&P 500, particularly in the year following the election. For instance, after the elections in 2012, 2016, and 2020, the S&P 500 experienced substantial growth, and Bitcoin tended to rise as well.
Looking at historical patterns may not predict exactly what’s going to happen next, but they provide us with useful clues. As the election progresses, investors will keep a keen eye on Bitcoin’s behavior. Moreover, the cryptocurrency market also expects a comparable reaction from the leading alternative coins.
Significantly, a current examination of Bitcoin’s price trends suggests that it could experience a robust surge, regardless of who wins the election. While there might be turbulent trades or even a dip on Election day itself, recovery is anticipated in the near future. Conversely, it seems probable that the US Federal Open Market Committee (FOMC) will stimulate market optimism, given the recent economic data suggesting a possible 25 basis points reduction in the Fed interest rate this week.
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2024-11-04 13:04