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How High Could Bitcoin Go Before the U.S. Election?

Bitcoin could reach new record highs before the upcoming US presidential election, driven by historical trends, on-chain data, and technical signals suggesting a potential bull run.

• Main Points:

  • Potential Bottom: Bitcoin’s price may have bottomed out at $49,500 in early August.

  • Historical Patterns: Previous US election years saw Bitcoin hitting local lows in Q3, followed by strong rallies.

  • Left-Translated Cycle: Bitcoin’s bullish cycle may peak earlier, suggesting a pre-election surge.

  • On-Chain Data: Reduced profit-taking by long-term holders indicates market strength.

  • Bull Flag Target: Technical analysis points to a potential bull flag breakout, targeting $80,000.

• Detailed Insights:

  • Potential Bottom: Bitcoin’s dip to $49,500 during the global market rout on August 5 may mark a local bottom, aligning with historical patterns where BTC typically finds its lows in the third quarter of US election years.

  • Historical Patterns: In past election cycles (2012, 2016, 2020), Bitcoin’s Q3 lows were often followed by rallies that led to new record highs post-election. This trend has raised expectations that Bitcoin could resume its uptrend as the November 2024 election approaches.

  • Left-Translated Cycle: Analyst SuperBro suggests that Bitcoin’s current cycle may be “left-translated,” meaning its peak could occur earlier than in previous cycles. With Bitcoin’s most recent peak happening before the April 2024 halving, this theory supports the idea of a pre-election price surge.

  • On-Chain Data: Long-term holders have been steadily taking profits, with $138 million locked in daily. However, a declining Realized Profit/Loss Ratio indicates that profit-taking is slowing, potentially paving the way for a new rally as election-related speculation builds.

  • Bull Flag Target: From a technical standpoint, Bitcoin has been forming a bull flag pattern since March. If BTC breaks out above the flag’s upper trendline, the next target could be around $80,000, potentially before the US election in November.

Related: Bitcoin Rises 2.5% to Near $61K, Following Stocks

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Bitcoin's Improving Indicators at $59K Could Trigger a Short Squeeze

Bitcoin's technical indicators are showing signs of improvement, suggesting that a short squeeze may be imminent as traders adjust their positions in response to potential macroeconomic shifts.

• Main Points:

  • Technical Indicators: Bitcoin’s RSI and Open Interest (OI) metrics are flashing positive signals.

  • Short Squeeze Potential: Increased short positions may force traders to cover, triggering a squeeze.

  • RSI Bottoming Out: Bitcoin’s RSI is at 61.13, indicating potential for a price rebound.

  • Open Interest Rise: OI has increased by 13.62% since August 6, signaling more short positioning.

  • Put-to-Call Ratio: The ratio stands at 0.51, showing more traders favoring call options.

• Detailed Insights:

  • Technical Indicators: According to Markus Thielen of 10x Research, Bitcoin's technical indicators are improving, with the Relative Strength Index (RSI) showing signs of bottoming out. The RSI, currently at 61.13, suggests that Bitcoin may be oversold, potentially leading to a price recovery.

  • Short Squeeze Potential: With more traders holding short positions as indicated by the rise in Open Interest (OI), there is potential for a short squeeze. This situation could force traders to quickly cover their short positions, leading to a rapid price increase.

  • RSI Bottoming Out: Bitcoin’s RSI score, which measures the speed and change of price movements, has declined by 8% since July 21. This score indicates that Bitcoin might be oversold, and a reversal could be on the horizon.

  • Open Interest Rise: Since Bitcoin's dip to $49,842 on August 5, OI has increased by 13.62%, reflecting an uptick in short positions. This rise in OI during a market downturn suggests that traders are expecting further price declines, which could backfire if a squeeze occurs.

  • Put-to-Call Ratio: The current put-to-call volume ratio is 0.51, with 66.33% of options being calls. This indicates that more traders are betting on Bitcoin's price increase, potentially setting the stage for a short squeeze if market sentiment shifts.

• Next Steps

  • Thielen noted that the market is at a critical juncture, awaiting the U.S. Federal Reserve’s decision on interest rates. A rate cut could trigger a rally in the stock market, with Bitcoin likely following suit, potentially leading to a significant price surge.

Related: 3 Reasons Bitcoin Won’t Be 'Boring' in September

Mt. Gox Moves $700M in Bitcoin After 3-Week Lull

Defunct crypto exchange Mt. Gox has moved 12,000 Bitcoin worth $709.4 million to an unknown wallet, sparking speculation about potential distribution to creditors.

• Main Points:

  • Significant Transfer: Mt. Gox moves 12,000 BTC worth $709.4 million to a new wallet.

  • Potential Distribution: Speculation arises about whether this transfer signals upcoming creditor payouts.

  • Expert Opinion: Galaxy’s Alex Thorn suggests most funds are going into cold storage, not distribution.

  • Historical Context: The last major transfer was on July 30, when Mt. Gox moved 47,229 BTC.

  • Remaining Holdings: Mt. Gox still holds 46,164 BTC worth approximately $2.7 billion.

• Detailed Insights:

  • Significant Transfer: On August 20, Mt. Gox made its first major Bitcoin move since July 30, transferring 12,000 BTC to an unknown wallet. This transaction, valued at $709.4 million, marks the most significant movement of Bitcoin from the exchange in weeks.

  • Potential Distribution: The move has led to speculation that Mt. Gox may be preparing to distribute Bitcoin to creditors who have been waiting since the exchange’s collapse in 2014. However, there is no official confirmation that this transfer is for distribution purposes.

  • Expert Opinion: Alex Thorn, head of research at Galaxy, believes that only a small portion of the funds—around $74.5 million—might be intended for distribution. The majority, he suggests, is likely being moved into fresh cold storage still under the control of the Mt. Gox estate.

  • Historical Context: This transfer follows a similar large-scale movement on July 30, when Mt. Gox moved 47,229 BTC to three unknown wallets. At that time, a significant portion of the Bitcoin was suspected to have been transferred to BitGo, a custodian working with Mt. Gox’s trustee.

  • Remaining Holdings: Despite these recent movements, Mt. Gox still holds a substantial amount of Bitcoin—46,164 BTC, valued at approximately $2.7 billion. Interestingly, many creditors appear to be holding onto their reacquired Bitcoin, possibly due to expectations of future price increases or to avoid capital gains taxes.

• Future Considerations

  • As Mt. Gox continues to move its Bitcoin, the market is closely watching for signs of distribution to creditors. The behavior of these early adopters, who may choose to hold their Bitcoin rather than sell immediately, could have significant implications for the market.

Related: Is Bitcoin About to Surprise Us?

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This article is not financial advice. Market conditions can change rapidly, and past performance does not guarantee future results