As Bitcoin (BTC) hovers around $68,626, the cryptocurrency market braces for a turbulent week coinciding with the upcoming U.S. Presidential Election. With BTC facing substantial support retests below the critical $70,000 mark, traders are increasingly wary of a potential pullback as volatility looms. Over the weekend, Bitcoin experienced a significant price correction that saw longs liquidate positions worth approximately $200 million, raising alarms about the strength of the current bullish momentum.
Signs of a Deeper Pullback
Popular trader Titan of Crypto has sounded the alarm on Twitter (now X), suggesting that Bitcoin might be on the verge of a more profound correction. Earlier in the week, Bitcoin made an attempt to break through the all-time high of $73,800 but ultimately rejected at that level. The resulting price action has left traders questioning whether the market will see further retracements before any potential uptrend resumes. Titan of Crypto pointed out key technical indicators using Ichimoku cloud analysis, highlighting a crucial trend line, the Tenkan-sen, which Bitcoin has failed to close above.
“Local bottom at $66,200 before a bounce?” Titan inquired, as he presented charts indicating the current struggle of Bitcoin to maintain its footing.
Key Support and Bounce Zones
The trading environment is notably charged, with open interest hitting record highs, which adds to the market’s sensitivity to price movements. Data from Cointelegraph Markets Pro and TradingView show that the recent downturn led to a modest rebound, but many analysts are predicting further price declines. Notably, fellow trader Credible Crypto has identified the range between $65,000 and $69,000 as a “must bounce zone.” This region is crucial for traders hoping for a reversal after the recent all-time high excursion.
While some traders remain cautious, others are more optimistic about potential reversals. “Bitcoin has pulled back onto the Fibonacci 0.618 level, which is a common support for a healthy pullback,” observed trader Alan Tardigrade. He expressed confidence that if this level holds, Bitcoin could soon embark on another impulsive move upward.
Also read : BlackRock’s Shift To Digital Assets- How Its $300 Million Bitcoin Buy Signals A New Era.
Market Dynamics During Election Week
The backdrop of the U.S. elections adds an extra layer of complexity to the Bitcoin market. Historical precedents suggest that election periods can create heightened volatility, compounded by the impending decision from the Federal Reserve on interest rates. As noted by QCP Capital, the options market is currently trading at a 7-day implied volatility of 74.4%, significantly surpassing the past week’s realized volatility of 41.4%. This discrepancy indicates a pronounced risk premium associated with the uncertainty surrounding the elections.
Despite Bitcoin dipping below the $69,000 threshold, market interest remains robust. Open interest in Bitcoin futures and options has surged to $40.65 billion and $25.3 billion, respectively—an increase of 24.20% and 36.76% since the beginning of October. This suggests that while traders are on alert, they remain engaged with the market, anticipating significant movements.
