All eyes are on the US Presidential election as the notion of a landslide victory for either Joe Biden and the Democrats, or incumbent Republican Donald Trump have flown out the window. The markets, both globally and on the crypto front, are also waiting with bated breath.
As the election counting began, Bitcoin managed to rise above $14,000 on an optimistic wave, but counting has drawn on and in these unprecedented times, will continue as mail-in ballots and other measures are accounted for.
The continuing uncertainty on who will emerge victorious has seen Bitcoin drop back down the middle $13,000 while the stock market and other markets are also facing a drop due to uncertainty. More than just uncertainty though, President Trump is advocating bigger disruptions.
Fear and uncertainty
Tracy Alloway, a financial journalist at Bloomberg and the co-host of Odd Lots, said the market drop being seen currently was likely due to President Donald Trump’s statement. She said:
“S&P 500 futures don’t like Trump’s suggestion that he’ll go to the supreme court to challenge election results. Now in the red.”
Naeem Aslam, Chief Market Analyst at AvaTrade also added:
“The US election has become a mess, and President Trump has made it clear that he is going to go to the Supreme Court. Basically, we are seeing a nightmare situation come true because now we are talking about legal battles. This uncertainty is going to keep traders on edge, especially after Trump has used the word “fraud.”
BTC price movements expected
This ongoing presidential race that could drag for a few days may have some short term impacts on the price of Bitcoin as it too feels the force of uncertain traditional market situations.
According to the data from CryptoQuant, the Estimated Leverage Ratio of Bitcoin futures on Binance hit an all-time high. This indicates that there are more traders in Binance’s BTC derivatives market than ever before.
Ki-Young Ju, the CEO of CryptoQuant, warned traders on Nov. 4 about heightened volatility caused by cascading liquidations. If there are an abnormally large number of contracts in the market, it can cause massive price movements.
Adding to the fact that Bitcoin briefly reached $14,000 and was not able to stay up there means that many analysts are predicting further drops in price. How far it will drop will probably be more dependent on how a candidate wins rather than which candidate wins. A messy result and prolonged Supreme Court battles would not be good for any markets and the hope would rather be a quick clean cut.