Why the Crypto Market Is Down Today? Election Week Triggers Anxiety

The crypto market is down today, Bitcoin (BTC), closed the first week of November with a short-term bearish outlook. More traders have feared the anticipated crypto volatility amid this week’s conclusion of the 2024 U.S. election and potential Fed rate cuts.

The Federal Reserve is poised to cut rates by 25 basis points in November, following a 50-point cut in September. With inflation at 2.1% and wage growth slowing to 0.8%, traders are on alert as the Fed’s meeting coincides with the election, potentially impacting the crypto market.

But what’s behind all this back-and-forth?

$350M Liquidation Shakes Crypto Market

Market jitters have led to substantial liquidations, reaching nearly $350 million on November 3 as Bitcoin briefly dipped below the critical $69,000 threshold. Traders’ anxiety is palpable as they position cautiously ahead of the U.S. presidential election outcome.

According to CoinGlass, the market saw a massive $349.78 million in liquidations, with $259.7 million in long positions and $90.08 million in short positions—marking the largest single-day liquidation event since October 25, when Bitcoin struggled to maintain its rally above $70,000.

Bitcoin’s Wild Ride: Peaks, Dips, and Recovery

Bitcoin’s price volatility has been significant over the past week. Starting around $67,700 on October 28, it quickly climbed to nearly $73,300 before sharply declining. By November 3, Bitcoin hit a low of $67,719, and it has since bounced back slightly, trading around $69,145.

Other major altcoins, like Ethereum (ETH), Dogecoin (DOGE), Solana (SOL), Ripple (XRP), and Litecoin (LTC), showed mixed results with only minor fluctuations. The Market Fear & Greed Index remains neutral at 53, according to CoinMarketCap, reflecting cautious sentiment among investors.

Election Odds: Trump vs. Harris

Political uncertainty is amplifying market tension. On Polymarket, betting odds for the U.S. presidential candidates show a tightening race between Donald Trump and Kamala Harris. Trump’s odds surged to 67% at the end of October but have since corrected to 56%, indicating the unpredictable nature of this election and its potential market impact.

Many in the crypto community view Trump as a more favorable candidate due to his promise to overhaul regulatory frameworks that could benefit the crypto sector.

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Potential Outcomes and Trader Predictions

Market speculation is swirling, with some traders predicting that a Trump victory could push Bitcoin to $100,000, while a Harris win might lead to a significant price drop by the year’s end. Crypto trader Daan Crypto Trades suggests that Bitcoin could experience at least a 10% swing depending on the election outcome, adding to the suspense in an already tense market.

How do you feel about the current market volatility? Are you planning to adjust your trading strategy based on the election?