Bitcoin inflows to centralized cryptocurrency exchanges are notably lower today than on previous U.S. Election Days, potentially indicating lower selling pressure around the election event, according to recent analysis from CryptoQuant.
"There seems to be less selling pressure for bitcoin from traders and investors moving funds into exchanges than there was during the last election and at the start of 2024. Daily bitcoin inflows into exchanges are currently around 45,000 bitcoin, compared to the 2024 peak of 95,000 back in March and 73,000 bitcoin before the 2020 U.S. presidential election," CryptoQuant Head of Research Julio Moreno told The Block.
Moreno also pointed out that bitcoin’s relative strength against altcoins like ether signals a preference among investors for bitcoin over other assets, especially amid market uncertainty.
“Bitcoin has outperformed most altcoins, which shows a renewed investor focus on bitcoin specifically rather than a broader allocation across cryptocurrencies,” Moreno explained. This trend is evident in the current cryptocurrency market structure, with bitcoin dominance having recently increased to over 60%, according to TradingView data.
Additionally, short-term holders appear to have been accumulating bitcoin ahead of today's election, with holdings for this group increasing by 343,000 BTC since early October, now totaling 4.25 million BTC. “This suggests a renewed interest in bitcoin among short-term holders,” Moreno added.
According to CryptoQuant’s latest report, bitcoin’s current valuation appears favorable. Now priced at over $69,000, bitcoin is just above its realized price, the average purchase price for all current holders, which suggests it is fairly valued, the report added. This aligns with bitcoin’s positioning during previous election cycles, including 2016 and 2020, when the digital asset also held steady near realized value.
Historically, bitcoin has performed well in the months following U.S. presidential elections. The report noted bitcoin saw a 37% increase in 2016, a 98% rally in 2020, and a 22% rise after the 2012 election in the period from Election Day to year-end. CryptoQuant analysts also said that bitcoin’s price pattern in 2024 has so far closely resembled its behavior in 2016, indicating the potential for a similar post-election rally if a positive catalyst emerges.
The analysts also said that despite recent price corrections driven mainly by profit-taking after a 20% rally, market fundamentals remain positive for bitcoin.
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