Bitcoin ($BTC) struggles amid election uncertainty

As the U.S. election moves into its penultimate day of voting, the crypto market is suffering from the uncertainty caused by such a tight race. Bitcoin ($BTC) is currently in its 6th red day in succession. If Trump doesn’t win, will the king of the cryptocurrencies fall a lot further?

Gap between Trump and Harris is closing

While Republican Donald Trump is ahead of Democrat Kamala Harris 57.9% to 42.3% respectively on Polymarket, the foremost prediction market, this gap has closed considerably from the high 60s to low 30s percentage gap that existed only a couple of weeks ago.

The betting market, one that generally proves to be quite accurate, is predicting a much tighter race as Tuesday’s election final day looms large.

Two key swing States slightly favour Harris

To add to all the uncertainty, two of the swing States – Michigan and Wisconsin – are now coloured light blue, signalling that the swing here is now slightly towards Kamala Harris. 

Probably the key to the whole election, and the most important of the swing States, is Pennsylvania. While this State is still light red in colour, meaning that it is swinging slightly in Trump’s favour, the margin here is really tight, and so it could still go either way, and potentially have the effect of winning the election for any of the two sides.

Trump still up in majority of swing States

Also, it does appear, at this late stage, that the prediction market is starting to match up with the traditional polling companies. The last poll data ending 2 November has Harris slightly ahead in both Michigan and Wisconsin, while Trump is up in all the other swing States of Pennsylvania, Nevada, Arizona, Georgia, and N. Carolina.

Bitcoin immediate future hangs on result

Under this barrage of doubt and incertitude, Bitcoin has been forced back under the major $69,000 horizontal support/resistance level. It now remains to be seen how Bitcoin will react to either a Trump, or Harris win. 

If it is Trump, the alpha cryptocurrency could be propelled into the last, potentially parabolic stage of its bull run. On the other hand, if Harris takes the presidency, the very negative attitude towards Bitcoin and cryptocurrencies of the current administration could continue, and this might have the effect of stopping the bull market in its tracks.

Bounce more likely, election result allowing

Source: TradingView

The 4-hour time frame chart for $BTC shows how deep this latest correction has gone. The price did drop beneath the 0.618 Fibonacci at one point, and came down nearly to the 0.786 Fibonacci, which would have been the deepest level for a retrace. However, it looks like the price might now be consolidating above the 0.618 Fibonacci.

That said, the $BTC price is still beneath the major horizontal resistance level (orange line) of the 2022 bull market top. If the price does take hold below this level, this would be a real point of concern for the bulls.

Nevertheless, with most of the short, medium, and long-term Stochastic RSIs either heading up, or looking to cross back up, a bounce from here would be the most likely scenario. A break of the descending trendline, coupled with a break back above $69,000 could signal the start of the next upside wave.

An ugly weekly candle

Source: TradingView

Looking at the weekly chart for $BTC, last week’s candle can be seen in all its ugliness. This was a poor weekly close and no mistake. In fact, the length of this upper candle wick is about the same size as the previously biggest upside wick right at the beginning of the bull flag.

This horrible wick shows how intense selling drove the price back under the $69,000 level yet again, and this could even presage another swing back down to much lower levels. 

However, the election result is coming on Tuesday, and this could still swing things back in favour of the bulls. That said, do not look for an immediate break higher. There may well be a period of consolidation/accumulation needed in order to absorb such an ugly weekly candle. Prepare for more volatility.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.