Bitcoin Volatility to Surge Ahead of US Election: Will It Hit $80,000 by Year-End?
Bitcoin Volatility Expected to Peak Before Election Results
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The cryptocurrency market is bracing for a wild ride in the coming week, as Bitcoin’s (BTC) volatility is set to intensify. According to a recent report by Bitfinex, a leading cryptocurrency exchange, a confluence of factors, including geopolitical uncertainty, macroeconomic trends, and the influence of the \”Trump Trade,\” is poised to drive significant price fluctuations.
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The report highlights the historical correlation between global events and BTC’s price movements. With the US Presidential election taking place next week, the potential outcomes have already impacted Bitcoin’s performance throughout the year. Both candidates have acknowledged the crypto industry, with Donald Trump emerging as a prominent figure in the sector after embracing Bitcoin and cryptocurrencies. This has led to a strong correlation between Trump’s winning odds and Bitcoin’s price trajectory, fueling the \”Trump Trade\” narrative.
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This narrative suggests that the market is anticipating Bitcoin’s performance based on the election outcome. As speculation and volatility increase, Bitfinex analysts anticipate several \”whipsaw price movements\” leading up to the election. This is evident in the recent 6.2% pullback that BTC experienced last week, before recovering to reclaim the $68,000 mark.
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Furthermore, option premiums and estimated daily volatility for the US stock market and Bitcoin are expected to spike next week. The report states that Bitcoin volatility will reach its peak between November 6 and November 8, coinciding with the expected delivery of election results. Interestingly, the highest implied volatility (IV) is projected for the November 8 strike price, potentially exceeding 100 vol for strike prices above $100,000 for BTC.
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Bitcoin’s Resilience and Year-End Potential
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Despite the heightened volatility, Bitcoin has demonstrated remarkable strength, maintaining its ground compared to September’s lows and surging by approximately 30% since last month’s dip. The cryptocurrency closed September, traditionally a challenging month, with a record high monthly close of 7.29% increase.
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While October’s closing performance may be less impressive due to volatility, Bitfinex analysts believe that the historically bullish seasonality of Q4 will still favor a positive rally for Bitcoin. Market positioning indicates a significant increase in call open interest for end-of-year options over the past few weeks.
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While Bitcoin is expected to experience higher-than-average volatility in the coming days, potentially leading to deep corrections, the market appears poised for a post-election surge above March’s all-time high (ATH) of $73,666. Furthermore, call options with a December 27 expiry and an $80,000 strike price have shown steady growth, suggesting that this target could be within reach by year-end.
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As of this writing, Bitcoin is trading at $71,197, representing a 3.4% increase in the daily timeframe.