Bitcoin may see a price pullback ahead of the U.S. presidential election on Nov. 5, with increased volatility expected in the days following, according to Standard Chartered’s Global Head of Digital Assets Research Geoff Kendrick.
Despite reaching $73,563 on Tuesday, bitcoin has been unable to break above its all-time high above $73,700 set on March 14. Kendrick suggested pre-election position liquidations could drive prices lower, making a breakout above the digital asset's all-time high less likely.
"There is a risk of pre-election position unwinding, meaning that we are more likely to be lower than $73,000 than higher, come election day," Kendrick wrote in a Thursday note.
Kendrick noted that, as the election approaches, the seven-day bitcoin options premium over the 30-day premium should continue to rise.
"This is due to the chance that it takes a few days to get full election results," he added. The Standard Chartered analyst pointed out that this trend may resemble the early January pre-spot bitcoin exchange-traded fund volatility.
"Options markets have some form in getting implied volatility pretty close to realised around known events such as the ETF launch and, by implication, the U.S. election," Kendrick said.
He said bitcoin prices would see a more significant move if the Republicans achieve a sweep of the U.S. Congress, adding that this could see the digital asset reach $125,000 by year-end and spark a renewed altcoin season. "We think a Republican sweep would be especially helpful to Solana in this regard," Kendrick added.
Bitcoin is currently changing hands at $71,100, according to The Block's Price Page. The global cryptocurrency market cap today is $2.54 trillion, a 1.9% decrease in the last 24 hours, according to Coinglass data.
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