The price of bitcoin surged to a nearly three-month high of $67,800 before dropping back to $65,000 during the U.S. morning hours on Tuesday, following an “upside-down V” pattern. Currently, bitcoin is trading at $65,500, down 0.6% over the past 24 hours. The broader CoinDesk 20 Index also saw a 1.3% decrease in the last 24 hours, with solana (SOL) and cardano (ADA) performing below BTC.
Despite the morning’s fluctuations, bitcoin has seen an 8% increase over the past week. Geoff Kendrick, an analyst at Standard Chartered, attributed this momentum to the support of crypto-friendly Republican presidential candidate Donald Trump. According to Kendrick, Trump now has a 56.9% chance of winning the presidency in November, which is his highest probability since Joe Biden withdrew as the Democratic candidate. Additionally, there is a 70% chance of a GOP-led House and Senate if Trump wins the presidency.
The sudden surge and decline in bitcoin’s price led to over $127 million in leveraged bets being liquidated within four hours. This liquidation occurs when a trader lacks sufficient funds to maintain a leveraged trade, resulting in the forced closure of positions and a temporary price spike or drop.
QCP Capital traders suggested that the recent rally may be election-related, triggered by Trump’s lead in prediction markets and polls. Democrat Kamala Harris’s commitment to establishing a crypto regulatory framework further bolstered the industry’s outlook. Moreover, disappointment with China’s latest stimulus package prompted some speculators to shift their investments from Chinese equities to bitcoin. Finance Minister Lan Fo’an’s announcement of new measures to support the property sector and potential government borrowing fell short of expectations, indicating a low likelihood of sustained investment in China-related assets.
In conclusion, the recent price action of bitcoin reflects the market’s reaction to various factors, including political developments and economic stimuli. Despite the temporary fluctuations, the overall upward trend in bitcoin’s price suggests continued interest and investment in the cryptocurrency. Investors should closely monitor market dynamics and be prepared for potential volatility in the coming days.