With the U.S. 2024 elections heating up and pro-crypto candidate Donald Trump leading in several major polls, Bitcoin (BTC) is showing signs of a short-term downtrend. Over the past week, Bitcoin’s price has dropped by more than 4%, holding above a critical support level of around $68.5k as of Tuesday morning, November 5, in the New York session.
Bitcoin closed October with a bullish sentiment, but November has opened with a bearish tone. Historically, Bitcoin has shown more declines than gains in November and December, making this period one of caution for investors.
Since retesting its all-time high in late October above $73k, Bitcoin price has been trapped in a falling trend. The low demand for Bitcoin in the past few days, as shown by the cash outflows from the US spot BTC ETFs, has weighed down the bullish sentiment.
Record Cash Outflows Show Investor Caution
On Monday, the US spot BTC ETFs registered the highest cash outflows since early May of about $541 million. The short-term uncertainties of the US elections are expected to heighten crypto volatility in the coming days, and thus remain unattractive to investors.
Adding to the mix, the Bank of England and the Federal Reserve are expected to announce rate cuts this Thursday in an effort to stimulate economic growth. These developments have led many investors to shift funds into stablecoins, which offer more stability amid economic and political uncertainty.
Popular crypto analyst Ali Martinez has noted that Bitcoin is currently retesting a key one-hour falling trendline, which has held over the past few days. Having been rejected five times at this level recently, Martinez suggests Bitcoin may continue its decline toward the $66k support range in the short term.
Could Election Results Trigger a Sell-Off?
Meanwhile, crypto critic Peter Schiff has warned of a potential “sell-the-news” reaction after the election, suggesting that Bitcoin may face more selling pressure.
However, this bearish outlook could be offset if Bitcoin consistently closes above $71k, signaling a stronger support level and possibly drawing renewed interest from bullish investors.
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