Potential Bitcoin Price Surge Before the US Election

In the lead-up to the upcoming US election, Bitcoin may be on track to achieve new all-time highs, supported by on-chain data and technical indicators.

Recently, Bitcoin (BTC) experienced a notable downturn, hitting a six-month low of around $49,500. This decline likely represents a local bottom, aligning with trends observed during previous election cycles in the US, where Bitcoin has often found its lowest price in the third quarter, typically around July or August.

Will Bitcoin Reach New Heights Before November?

Technical analyst SuperBro has noted that in previous election years—2012, 2016, and 2020—Bitcoin’s third-quarter lows were frequently followed by significant upward movements, often culminating in new record highs in the aftermath of the presidential elections.

With the November 2024 election approaching, there is a growing expectation that Bitcoin might again enter an upward trajectory, particularly given the high-profile contest between Donald Trump and Kamala Harris.

SuperBro has also pointed to the “left-translated cycle” theory, which suggests that Bitcoin’s bullish cycles are beginning earlier than in prior years. This could indicate a quicker approach to market peaks.

Evidence supporting this theory includes Bitcoin’s recent peak occurring a month prior to its fourth halving in April 2024, contrasting with historical patterns where peaks typically follow the halving event.

If the left-translated cycle theory holds true, Bitcoin could ascend faster than traditional market participants expect, potentially reaching new heights prior to the election. This shift may leave slower investors sidelined, causing them to miss early gains.

Moreover, factors such as Trump’s favorable view of Bitcoin and regulatory shifts under different administrations could stimulate speculative buying, further driving price increases. Current betting markets, such as Polymarket, indicate an uptick in Trump’s odds of winning the upcoming election.

On-chain Data Indicates Less Profit-Taking

Long-term holders (LTHs) of Bitcoin have managed to secure an average profit of approximately $138 million daily during recent periods of market stagnation, as highlighted in Glassnode’s weekly report.

This consistent profit-taking underscores a sustained influx of capital into the market, which helps stabilize Bitcoin’s price amidst volatility.

At the same time, the Realized Profit/Loss Ratio remains elevated but is showing signs of decrease from its peak, indicating that LTHs may be starting to pull back on profit-taking activities.

Historically, this metric tends to hit high levels during market peaks and declines before fresh bullish trends emerge, as seen in previous cycles in 2013 and 2021. The combination of a declining Realized Profit/Loss Ratio and historical LTH behavior suggests a potential Bitcoin rally leading up to the election.

Technical Analysis Suggests a Bull Flag Formation

From a technical standpoint, Bitcoin may be poised for a bull flag breakout as it approaches the US presidential election.

Since March, BTC’s price has shown a pattern consistent with a bull flag, confirmed through its fluctuations within a descending parallel channel following a strong uptrend.

This formation typically indicates a higher likelihood of sustained bullish momentum, particularly if Bitcoin’s price breaks decisively above the upper trendline of the flag. If this occurs, the target for the bull flag breakout could aim around $80,000 by election day in November.

Please note that this content is for informational purposes only and does not constitute investment advice. Every investment carries risk, and readers should conduct thorough research when making financial decisions.