Bitcoin briefly rallied over 3% over the last hour reaching as high as $71,500 as markets respond to Donald Trump’s early lead in the United States election.
The cryptocurrency market experienced a surge as Bitcoin briefly rallied over 3% in the last hour, reaching as high as $71,500. This sudden jump in price was a response to the early lead of Republican candidate Donald Trump in the United States election. As markets eagerly await the outcome of the election, the price of Bitcoin has retraced slightly to $71,309 at the time of publication. Alongside Bitcoin, other cryptocurrencies such as Dogecoin (DOGE), Shiba Inu (SHIB), Ether (ETH), and Solana (SOL) also witnessed increases in their prices.
Bitcoin's Rally and Market Volatility
The price of Bitcoin experienced a significant rally as Donald Trump currently leads Kamala Harris in electoral college votes. This rally indicates the market's positive response to Trump's lead in the election. However, it's important to note that crypto assets have shown heightened volatility during the election period. Bitcoin fell 2.4% to a local low of $68,755 at 8:00 pm UTC but quickly recovered. Similarly, Dogecoin and Shiba Inu also experienced some downward volatility but remained up over the last 24 hours.
Elon Musk's Influence on Dogecoin
One interesting factor contributing to Dogecoin's rally is billionaire Elon Musk's continued support for Donald Trump. Musk's ties to Dogecoin and his "Department of Government Efficiency" movement have fueled the meme coin's popularity. The movement aims to cut government spending, which both Trump and Musk consider wasteful. As a result, Dogecoin has gained traction among crypto enthusiasts, contributing to its upward price movement.
Market Predictions and Volatility Index
Market pundits have predicted that market volatility will peak sharply following the election results. This volatility could either "fuel big moves" or result in a "much deeper correction" for Bitcoin's price action, according to Bitfinex analysts. Traders are expecting Bitcoin's price to swing at least 10% in either direction once the election is called. The volatility index for Bitcoin reached a new three-month high of 65.7 on November 3 but has since stumbled to 63.8. These numbers indicate the market's uncertainty and the potential for further price fluctuations.
The US Election and its Impact on Cryptocurrency
The outcome of the US election holds significant implications for the cryptocurrency market. As the first polls close on November 5 at 11:00 am UTC, the market will closely monitor the developments. The announcement of the election results could take hours or several days, depending on narrow margins and potential recounts in swing states. This prolonged uncertainty could further exacerbate market volatility.
The US Federal Reserve's Meeting
In addition to the US election, the Federal Open Market Committee meeting by the US Federal Reserve on November 7 is another event that could impact cryptocurrency prices. Current forecasts project a 94.1% chance of another 25 basis point interest rate cut. This decision by the Federal Reserve could further influence market sentiment and potentially contribute to increased volatility.
Conclusion
The cryptocurrency market experienced a surge as Bitcoin jumped above $71k in response to Donald Trump's early lead in the US election. Alongside Bitcoin, other cryptocurrencies also witnessed price increases. However, market volatility remains a key concern during this period of uncertainty. Traders and investors anticipate significant price swings once the election results are announced. The outcome of the US election and the Federal Reserve's meeting will likely impact the future of cryptocurrencies. As the world watches the developments, the cryptocurrency market is poised for both opportunities and challenges.