ecently, Bitfinex released a very important report about bitcoin, stating that the asset is about to enter a period of high volatility. One of the main reason driving Bitcoin’s price is the anticipation of U.S election and a Trump victory. Markets, for the most part, believe that a Republican party performance is good for the greenback although they remain skeptical about the Democrats.
Options Market Response
Furthermore, There is proof that the cryptocurrency options market is preparing for future volatility. As we get closer to the early November US election results, option premiums and Predicted Daily Volatility is rising quite significantly. However, the implied volatility curve of Bitcoin for strike price on November 8 is above 100 for options with value above $100,000 this indicates that traders are expecting lots of volatility.
Trump Factor Impact
It is important to note, that The bullish trend after 6 months of consolidation and price suppression, has been triggered by the “Trump trade” inciting that Trump is going to win the election, since the former president provided a positive outlook on cryptocurrency unlike the counter party. The polling data from RealClearPolitics and Polymarket shows that there is approximately 59% – 64.9% chance of Trump to win the election, which casts another level of unpredictability to the markets.
Fourth Quarter Outlook
Thus, while there is uncertainty in the current Bitcoin market, Bitcoin has historically presented the best results in terms of price during the fourth quarter year from halving years. This cryptocurrency has already posted a significant price appreciation and has increased more than 30% from September lows. The statistics reveal that the average fourth quarter increase is 31.34% and there was no bearish fourth quarter seen in the halving years.
Bitcoin Faces Pre-Election Market Swings
Uncertainty around the elections, Trump effect and traditional end of the year rally make the trading conditions for Bitcoin quite volatile, but at the same time quite optimistic. The major thing that investors should expect is high volatility, although the Q4 has often delivered positive returns.
