Bitcoin price volatility could increase and a potential pullback could occur as the US presidential election approaches, according to Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered.
Kendrick’s analysis suggests that pre-election position liquidations could pressure Bitcoin prices and reduce the likelihood of a break above all-time highs.
Bitcoin, currently trading at $70,563, recently approached the all-time high of $73,700 set on March 14. However, Kendrick noted that election-related sell-offs could hurt Bitcoin’s chances of breaking that threshold. “There is a risk of unwinding pre-election positions, meaning we are more likely to be below $73,000 on Election Day,” he wrote in a recent note.
Kendrick pointed to the Bitcoin options market, which could signal increased volatility as the election approaches. The seven-day option premium is rising above the 30-day premium, a trend Kendrick attributes to the possibility of a late reaction to the election results. Kendrick said the trend is reminiscent of the volatility experienced before the Bitcoin ETF was launched in early January. “The options markets have a form that is very similar to the implied volatility that occurs around well-known events like ETF launches and, by implication, the US election,” he said.
While a short-term pullback is in sight, Kendrick believes that a Republican takeover of Congress could spark a significant BTC rally, with BTC reaching $125,000 by the end of the year. A Republican victory could also support other digital assets, with Kendrick noting that Solana would be a potential winner in this scenario.
Disclaimer
The information provided in this article is only for educational and informational purposes and should not be considered financial or investment advice. We are not licensed financial advisors. Always conduct your research and seek guidance from a certified financial professional before making any investment decisions.
