Bitcoin Rebounds as Traders Eye U.S. Election

Bitcoin’s price has bounced back from a ten-day low as traders navigate a liquidity hunt following last week’s surge to near-all-time highs. The leading cryptocurrency is trading around $67,500, after dropping to $65,160 on Thursday, according to CoinGecko.

This latest price action comes after Bitcoin breached $69,000 over the weekend. Just shy of its all-time high of $73,700 set in March 2021. While Bitcoin dipped earlier this week, some experts believe the drop may be temporary as traders reset their positions.

Liquidity Hunt and Market Movements

Ryan McMillin, chief investment officer at Merkle Tree Capital, described the recent dip as a “natural liquidity hunt”, rather than a response to U.S. election odds. A liquidity hunt occurs when the market flushes out leveraged positions. Particularly those betting on price increases, leading to downward pressure on Bitcoin’s price.

“When traders are leveraged long, a price reversal can force liquidations. Which helps reset speculative excess before an upward trend can continue,” McMillin explained. He added that $70,000 resistance could be retested soon. With a more significant breakout possibly linked to the upcoming U.S. presidential election.

U.S. Election and Market Sentiment

The November 5 U.S. presidential election is viewed as a critical event for the crypto industry. With candidates Donald Trump and Kamala Harris both expected to introduce favorable regulations if elected. Bitcoin’s price has shown resilience ahead of the election, with many expecting further volatility.

Polling data from FiveThirtyEight shows a tight race, with Trump slightly ahead. Experts predict Bitcoin will fluctuate between $63,000 and $68,000 in the run-up to election day. With the possibility of a breakout above $71,000 signaling a market expectation of a Trump victory.

“A decisive break above $71,000 would suggest the market sees a high probability of a Trump win,” said Pratik Kala, head of research at Apollo Crypto. Similarly, QCP Capital, a Singapore-based trading firm, noted that Bitcoin is “well-supported with potential upside” ahead of the election.

Upcoming Data and Market Expectations

The Non-Farm Payroll (NFP) report, scheduled for release on November 1, is also expected to play a key role in shaping market expectations. The NFP data, which will offer insights into the U.S. labor market, is anticipated to show a modest increase in employment figures.

“As the last NFP report before the Federal Reserve’s next meeting, it will be critical in influencing the Fed’s next move on interest rates,” QCP Capital wrote in a note.

With both the U.S. election and the NFP report looming, Bitcoin traders are likely to remain on edge as they await signals for the next significant market movement.