3 Reasons Bitcoin’s Price Floor Could Be $67.3K

Data indicates that traders are overlooking the current Bitcoin price dip and placing bets on new highs after the U.S. elections conclude.

Source: bigpara.hurriyet.com.tr

Between Oct. 31 and Nov. 4, Bitcoin dropped 6.7%, falling below $67,500 for the first time in eight days. This decline led to the liquidation of over $190 million in leveraged long positions and coincided with uncertainty around the Nov. 5 U.S. presidential election. Despite this short-term bearish trend, three Bitcoin derivatives metrics suggest the market remains calm. Positive signals include the long-to-short ratio among top traders on exchanges, total BTC futures open interest, and stablecoin demand in China. Whales and markets show confidence in Bitcoin’s recovery, as their aggregate spot and futures positions remain stable even after the dip below $67,500 on Nov. 4.

While traders are optimistic about Bitcoin’s price outlook, they are cautious about pushing above $70,000. Some analysts warn that a win by Kamala Harris and the Democratic Party could bring more regulatory scrutiny, potentially limiting cryptocurrency's integration with traditional finance.

U.S. Elections Create Uncertainty Limiting Short-Term Upside

A well-known crypto trader suggests that Kamala Harris’s unclear stance on cryptocurrencies plants the seed for uncertainty, adding that uncertainty can be worse than opposition. Even if Harris’s policies ultimately benefit the industry, they are unlikely to match the promises of Republican candidate and former President Donald Trump. Trump has hinted at dismissing the SEC Chair on day one, though his specific plans to encourage Bitcoin adoption remain unclear. There is also debate over how quickly significant changes in government agencies and the Treasury could occur. Consequently, investors see limited motivation to push Bitcoin’s price to a new all-time high, regardless of the election outcome.

The main driver behind differing expectations for the U.S. presidential election is the focus on digital assets, including central bank digital currencies (CBDCs) and tokenized assets, which are distinct from Bitcoin. Blockchain use for digital asset representations of real-world assets has minimal impact on overall Bitcoin demand. To assess if professional traders are reducing exposure, monitoring total Bitcoin futures open interest is key. A sharp decline would indicate hesitation with sector exposure, regardless of sentiment. 

The current open interest of 582,000 is similar to the previous week’s and 10% higher than Oct. 4 levels, suggesting investors are still increasing leveraged positions despite recent uncertainty. Combined with top traders’ long-to-short data, this reflects moderate bullish sentiment even after Bitcoin’s rise above $73,500 on Oct. 29. In China, traders showed resilience, with the USD Tether (USDT) stablecoin trading close to its fair value against the official USD/CNY rate. Historically, during high demand for cryptocurrency, USDT often trades at a premium. Overall, derivatives metrics indicate no stress, and traders remain optimistic about the bull market resuming after the election.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.