Why is crypto down? Why is Bitcoin Down? Will Bitcoin recover? This article explores the crypto market drop ahead of the US election.
Crypto traders and investors are closely monitoring Bitcoin. After unexpectedly spiking above $73,000 and coming closer to all-time highs, many thought the coin would easily slice $74,000.
As things stand, the digital gold is now struggling for traction, cracking below $70,000 and posting losses for five straight days.
The result? Well, a noticeable drop in the total crypto market cap valuation.
Why is Crypto Down? Bitcoin and Crypto Prices Fall Before US Election
According to Coingecko, though Bitcoin is stable above $68,800 when writing, the industry is down nearly 1% as the total market cap shrinks to around $2.4 trillion.
(Source)
Bitcoin still dominates, commanding a market share of 56.7%, gnawing more from altcoins, mainly Ethereum, BNB Chain, and Solana.
For now, traders and crypto market participants can only watch. Several factors are actively shaping crypto prices at press time.
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Will Bitcoin Recover? Elections and Macroeconomic Factors Affecting Sentiment
Top of the list is the upcoming general elections in the United States.
Though Donald Trump still leads the poll, looking at Polymarket data, his lead has been narrowed over the past few days.
His lead, which topped 65% by the end of October, is now around 55%.
(Source)
This shift only adds to unpredictability. More investors are concerned about potential crypto policy changes with a new president taking over.
Despite the fluctuation, many crypto supporters say a Donald Trump win could drive prices over $70,000 and even above $100,000 in the coming weeks.
(Source)
This projection is optimistic but cannot be dismissed. Historically, Bitcoin tends to recover strongly in December.
After sliding from the end of Q1 2024, bulls might find relief in the coming days or weeks.
The outcome of the presidential election will shape the pace of this growth. However, macroeconomic factors will sustain gains after the election excitement fades.
At the top of the list is the upcoming FOMC meeting, where the Federal Reserve is projected to cut funding rates.
As rates drop, borrowing becomes cheaper. This regime has seen risk-on assets like Bitcoin perform exemplary well in the past.
With Jerome Powell and the FOMC becoming dovish, Bitcoin, an emerging asset class and a safe haven, could benefit from the low borrowing cost.
The question remains: Will Bitcoin shake off weakness and hit $100,000 by the end of the year?
(BTCUSDT)
Bulls may turn aggressive by the end of the weak, forcing prices above $73,000.
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