Greed was awakened in the markets a few days before the presidential elections in the United States on November 5 and the price of Bitcoin (BTC) was about to record a new all-time high (ATH).
This feeling is reflected in the fear and greed index prepared by CoinMarketCapwhere you can see that the indicator currently shows 67 points (greed) and For some traders it can be interpreted as a probable price correctionthat is, a drop in the price of BTC.
When the market is dominated by greed, investors tend to buy impulsively due to FOMO (fear of missing out), which exaggerates bullish expectations. As enthusiasm fades, Profit taking usually occurs, which puts downward pressure on the price of the digital asset.
However, it is important to highlight that this is not an absolute rule; in some periods it is followed while in others it is not. The market may remain in a state of greed for weeksespecially in “bull run” cycles.
It should be noted that the index reflects the sentiment that predominates in the market and is calculated according to the price, commercial data of bitcoin and cryptocurrencies most popular and user behavior.
As seen in the following graph, The index had not reached the barrier of 67 points since last May 21.
Fear and greed index in the last year. Source: CoinMarketCap.
Despite the signal given by the fear and greed index, the presidential elections in the United States could act as a catalyst for BTC to reach a new all-time high (ATH) in the short term.
The impact of the elections in the US
On November 5, the world’s leading financial power will elect its next president and both candidates, donald trump (republican) and Kamala Harris (Democrat), have mentioned BTC and cryptocurrencies during their campaigns.
Although both seek support of the industry, with promises of friendly regulation and growth opportunities, The market seems to be leaning towards a victory for former President Donald Trumpwho currently prevails in Polymarketthe Cryptocurrency betting platform.
Trump gains a major advantage on the cryptocurrency betting platform. Source: Polymarket.
In this framework, less than a week before the election, the price of the digital currency created by Satoshi Nakamoto It was yesterday, Tuesday, October 29, less than $1,000 away from exceeding the ATH of $73,700 that it marked in March 2024.
At the time of publication of this note, the price of BTC is $71,680, as seen in the following chart. TradingView:
Bitcoin price from January to October 30, 2024. Source: TradingView.
Uptober and the halving effect
Another issue to keep in mind is that October, historically, is a bullish month for BTC throughout its history. For that reason, investors refer to it as “uptober” (bullish October, in Spanish).
In the following graph of CoinGlassit can be seen that the digital currency had 9 Octobers in green and only two with negative performance. With one day left until the end of the tenth month of the year, the price of BTC rose more than 13%.
Monthly returns for the price of bitcoin from 2013 to 2024. Source: CoinGlass.
Finally, it is worth highlighting the effect that the BTC halving could have in the coming months.
As CriptoNoticias has explained, the halving It is the event that reduces the issuance of the digital currency by half every four years. Historically, in the months before and after this event, the BTC price experienced a new ATH.
According to the Bitcoin Halving Cycle Profit, an indicator from TradingView, the next bullish cycle could begin in January 2025as seen in the areas colored green.
The orange squares mark the beginning of the halving while the green ones mark the beginning of the bullish cycle. If history repeats itself, BTC could hit new highs.
The bullish period would begin in January 2025, if history repeats itself. Fountain: TradingView.
With most bitcoins issued, at this point the halving effect has to do with market psychology. What happens is that investors behave according to historical patterns, which can be seen in the graph above.
Although, of course, If the US presidential elections yield the results expected by the marketthe digital currency could reach a new ATH in the short term.
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