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In summary
- Bitcoin price rebounded from a ten-day low, trading around $67,500 after falling to $65,160 on Thursday.
- Experts postulated that the asset’s decline this week may have been short-lived, attributing it to a “hunt for liquidity.”
- The US presidential election on November 5 could be crucial for the industry, with expectations of favorable regulations.
Bitcoin price has rebounded from a ten-day low, as traders try to assess a short-term direction amid a “liquidity hunt” following last week’s rise to its near all-time high.
The asset is trading relatively stable on the day around $67,500 after falling to $65,160 on Thursday, according to data from CoinGecko.
This comes as the price of Bitcoin surpassed $69,000 on Sunday. The asset’s all-time high, set on March 14, sits slightly above $73,700.
This has led some experts to posit that the asset’s decline this week may have been short-lived.
“We don’t necessarily see this as tied to the probabilities of the US election moving, but rather as a natural search for liquidity after a big move higher last week,” said Ryan McMillin, chief investment officer at the Cryptocurrency fund manager Merkle Tree Capital, to Decrypt.
A liquidity hunt refers to the process in which the market “eliminates” leveraged positions, especially those with long exposure or traders betting on price increases.
When traders are leveraged long, a price reversal can force them to sell or liquidate their positions, creating downward pressure on the price of an asset. This is considered a healthy correction, removing speculative excess before the market can resume its uptrend, McMillin said.
“We hope to retest the $70,000 resistance soon, but we might have to wait until the US election for a real takeoff,” McMillin said.
The US presidential election on November 5 could prove crucial for the industry, with participants hoping that both former President Donald Trump and Vice President Kamala Harris will introduce favorable regulations that offer clearer guidance for companies operating in the country.
It’s already proving to be a boon for Bitcoin’s resilience in the run-up to that date, experts told Decrypt.
While the election remains a close race, according to FiveThirtyEight polls, which show Trump slightly ahead, the price of Bitcoin is expected to fluctuate between $63,000 and $68,000 in the final days of the race.
This was stated by Pratik Kala, portfolio manager and head of research at digital asset fund manager Apollo Crypto.
“A decisive break above $71,000 will indicate that the market is assigning a high probability to a Trump victory,” Kala told Decrypt.
It’s a view shared by others, including those at Singapore-based digital asset trading firm QCP Capital, which wrote in a note on Wednesday that Bitcoin remains “well supported with upside potential.”
“Given Trump’s more crypto-friendly stance, it’s no surprise that Bitcoin is trading higher,” he said.
The firm noted the convergence of the election and Nonfarm Employment Report data scheduled for Nov. 1, which is expected to show a modest increase in employment numbers.
“All eyes are on the release of the Nonfarm Employment Report next Friday as uncertainty around the labor market persists,” QCP wrote. “Being the last NFP report before the next Fed meeting, it will play a critical role in forming expectations about the Fed’s next move on interest rates.”
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