Market Analysis and Election Impact

Market nerves over the upcoming United States Presidential Election have compounded an already overheated Bitcoin trading environment where open interest hit record highs. Now, observers see the risk of further BTC price retracement before its uptrend resumes.

“Local Bottom at $66,200 Before a Bounce?” – Titan of Crypto queried.

An accompanying chart showed Ichimoku cloud data for 1-day timeframes, with price deviating below one of the indicator’s key trend lines, Tenkan-sen.

“BTC couldn’t close above Tenkan, signaling a possible more profound pullback,” he continued.

If the breakout is confirmed, we might see a retest of Kijun around $66,200, which could mark a local bottom. Previously, Titan of Crypto named $71,300 as an important resistance level to flip to support while examining Ichimoku on monthly timeframes.

Bitcoin Traders Line Up Bounce Zones

Bitcoin meanwhile liquidated $200 million of long positions on its way down to current levels, which included a brief drop below $68,000.

Data from Cointelegraph Markets Pro and TradingView reveals only a modest rebound occurring thereafter, leading to more BTC price downside predictions.

“The area between $65,000 and $69,000 is a ‘must bounce zone,’” – Credible Crypto.

He reiterated that the week’s trip to near all-time highs may remain an upside deviation.

Another analyst, Alan Tardigrade, noted:

“Bitcoin has pulled back onto Fibonacci 0.618 level, which is a common support for a healthy pullback. If this level holds, $BTC could see another impulsive move.”

Increased Volatility and Trading Interest

Trading sources concurred about the risk of heightened volatility during election week, which also plays host to the Federal Reserve’s next decision on interest rates.

Despite Bitcoin’s dip below $69,000, market interest remains high, with open interest for both BTC futures and BTC options staying elevated:

• Total BTC futures: $40.65 billion (up 24.20% from early October)
• Total BTC options: $25.3 billion (up 36.76% from early October)

According to QCP Capital,

“Options market is trading BTC 7-day implied volatility at 74.4%, substantially higher than the past 7-day realized volatility of 41.4%, indicating a significant risk premium around the elections.”