As U.S. Votes, Bitcoin Flirts With $70k — Which Way Will It Break?

Given that Bitcoin remains undervalued compared to previous cycles — with only a modest 7% increase since the last halving—some analysts argue that a long-term rally could be in the cards, possibly reaching new highs if the election triggers sustained interest.

Beyond the election, other key data points will shape Bitcoin’s path this week. 

On Nov. 7, initial jobless claims data is expected, offering insights into the U.S. labor market. Last week, claims came in at 216,000, a decrease from 228,000 the prior week, but predictions for this week point to a slight rise to 220,000. 

Higher jobless claims could indicate a softening labor market, which may dampen consumer spending and traditional investments in stocks and bonds. 

This scenario could increase Bitcoin’s appeal as an alternative investment, especially for those seeking to hedge against economic volatility.

The Federal Open Market Committee meeting on Nov. 6-7 adds another layer of anticipation. The Fed’s focus on balancing inflation and employment has kept the market guessing about rate cuts, and expectations are high. 

In its last meeting, the Fed cut rates by 50 basis points (0.5%) as inflation eased to 2.4%, inching closer to its 2% target. 

Unemployment, however, has risen from 3.7% to 4.1% this year, signaling potential challenges in the labor market. 

Economists are speculating that another rate cut is likely, with CME’s FedWatch tool indicating a 99.9% probability of a 25-basis-point cut.

For Bitcoin, a Fed rate cut could be a bullish signal. Lower rates tend to reduce the appeal of traditional savings and investments, driving interest toward risk-assets like BTC.

ETF inflows and liquidations paint a mixed picture

As we edge closer to the U.S. elections, Bitcoin is showing mixed signals. October 2024 wrapped up with BTC posting a modest 10.76% gain — considerably lower than its impressive 28.52% rally in October 2023, hinting that investors are proceeding with caution, likely waiting for more clarity on the election outcome.

In the past 24 hours leading up to Nov. 4, the market witnessed significant liquidations, with a total of $193 million in positions wiped out. 

A closer look shows that $101 million in long positions and $91 million in shorts were liquidated, revealing an unusual balance between bullish and bearish bets being forced out of the market. 

However, Bitcoin bore the brunt of these liquidations, taking a hit of over $52 million — split between $21.05 million in long liquidations and $30.48 million in shorts, suggesting that despite some optimism, bearish forces are still actively pushing against BTC’s upward momentum.

Adding to this cautious mood, spot Bitcoin ETFs—which saw enthusiastic inflows in most of October — experienced their first outflow on Nov. 1 after a steady inflow streak beginning Oct. 23. 

Notably, Oct. 29 and 30 alone saw massive inflows of $827 million and $896 million, respectively, signaling strong initial demand for BTC ETFs. 

But the recent outflow may hint at short-term profit-taking as investors await further cues from the elections and Fed meeting.

Is Bitcoin headed for a major move post-election?

As Bitcoin hangs at a critical level, the coming days could be crucial for its next big price shift. 

Some traders, like Daan Crypto Trades, believe Bitcoin is primed for a major swing. According to Daan, “There is a good probability that price will see at least a 10% move to either direction depending on who ends up winning the election.” 

In the macro landscape, the economy shows signs of strain, with last week’s job data reported as the worst in three years. This softening in the labor market has some, like Michaël van de Poppe, speculating that we might soon see the start of an “up only season,” especially if the Fed decides to implement further rate cuts. 

With Bitcoin recently testing key support, he cautions that “more volatility” is likely, implying further turbulence but potential buying opportunities if prices dip lower.

Meanwhile, Spot On Chain points out that historically, the real bull run for Bitcoin has often begun after elections, regardless of the winning party. 

Their outlook suggests that “whether Trump or Harris becomes the next president, BTC will continue its upward journey,” even reaching the $100,000 mark soon. 

In fact, if Republicans win both the presidency and Congress, Standard Chartered analysts are projecting Bitcoin could even reach $125,000 — a scenario that would mark a historic high for the crypto market.