- Bitcoin’s fear and greed index shows optimism.
- BTC price action and MVRV Z-Score are all pointing up.
Bitcoin [BTC] could see a dramatic ride with the US presidential election, but the outcome will greatly influence its movement.
Historically, BTC has seen significant price movements during election periods, and a similar trend could follow this time.
The Bitcoin levels of the Fear and Greed Index were at face value at the time of writing, suggesting that the price could rise due to the impact of the US election results on the crypto markets.
The US elections have consistently impacted cryptocurrencies such as Bitcoin. As one of the largest economies in the world, the United States plays a crucial role in market liquidity.
Source: Glassnode
During the last three elections, Bitcoin’s price responded positively, with traders anticipating optimistic gains amid political changes.
Should Donald Trump win Kamala Harris, many analysts believe BTC will rise even more intensely, driven by expectations of a pro-crypto approach. While a Harris win could still support BTC, the upside could be more modest in comparison.
Historical BTC Price Action and MVRV Z-Score
Examining past election cycles provides insight into Bitcoin’s potential performance. The 2012 election saw Bitcoin surge over 10,000%, while the 2016 election saw a 2,698% gain, and the 2020 election boosted BTC by 386%.
While each election year has seen successively smaller returns, it remains highly likely that Bitcoin will react to the outcome of the election.
With the political discourse surrounding Bitcoin and cryptocurrencies becoming more prominent this cycle, BTC may experience even greater volatility.
Source: Ali/X
A Trump win could encourage bigger parabolic moves, while a Harris win would likely still lead to gains, albeit at a slower pace.
In terms of Bitcoin’s valuation metrics, the MVRV Z-Score currently indicates significant upside potential. This score measures market capitalization versus realized capitalization and helps assess whether BTC is overvalued or undervalued.
With the MVRV Z-Score near 2, BTC still has room to climb to 6, a level where profit-taking by long-term holders could lead to a correction.
Source:
Historically, this metric has served as a reliable indicator for pinpointing BTC’s highs, and current readings suggest that BTC has not yet reached peak levels.
Traders who follow the benchmark believe that BTC could continue its upward trajectory as buying pressure increases.
Active focuses on momentum
Technical indicators also point to a potential rally. The 30-day moving average recently crossed above the 365-day moving average, creating a “golden cross,” a bullish signal often associated with strong upward momentum.
This crossover, coupled with increasing transaction volumes – nearly double that of the 2021 cycle – signals growing market activity and buying interest.
However, if the 30-day moving average fails to maintain its position above the 365-day moving average, BTC’s price trend could stagnate, resembling the phase of mid-2021 when momentum faded.
Read Bitcoin (BTC) price prediction 2024-25
Bitcoin’s price is poised to make significant moves in response to the election outcome. While the broader trend suggests optimism, investors should remain cautious as market conditions can change quickly.
With volatility likely to increase, Bitcoin’s price would largely depend on the political landscape and continued investor interest.