Konstantin Anissimov, Executive Director at CEX.IO
Bitcoin Rises to a New Yearly High of $13,864
Volatility has struck back the cryptocurrency market a week ahead of the U.S. presidential election. While most altcoins went through a steep correction, Bitcoin rose to new yearly highs. Its uninterrupted upward price action turned heads as the narrative about BTC’s ability to act as a hedging asset during times of uncertainty resurfaced.
The flagship cryptocurrency kicked off the week of October 26th, trading at $13,045. Prices tumbled during the first few hours of Monday’s trading session, but the bulls immediately stepped in. Indeed, BTC dropped to a weekly low of $12,785 around 16:00 UTC, and from that point on, all it did was surge.
By the end of Tuesday’s trading session, October 27th, Bitcoin had risen more than 8%. It went from trading at a weekly low of $12,785 to a new yearly high of $13,864. Nonetheless, many market participants who bought BTC around the same price level in June 2019 seemingly took advantage of the bullish impulse to break even in their underwatered positions.
As sell orders began to pile up, Bitcoin took a 7% nosedive towards the $12,900 support level. The price action that followed was significantly choppy, while the trend remained positive. Regardless, the pioneer cryptocurrency was able to close on Friday, October 30th, at a high of $13,505, providing investors a weekly return of 3.53%.
Ethereum Generates 5.70% in Weekly Losses
Ethereum was one of the altcoins that suffered the most throughout the week of October 26th. As a matter of fact, the smart contracts giant opened Monday’s trading session at a high of $406.32 and quickly began trending downwards. Roughly 16 hours after the weekly open, Ether had dropped nearly 6% to hit a low of $382.21.
Sidelined investors appear to have taken advantage of the downward trend to enter the market. The spike in buying pressure saw Ethereum rise over 7.7% to hit a weekly high of $411.77 on Tuesday, October 27th, at 16:00 UTC. However, the bears stepped back into the market and regained control of ETH’s price action.
The second-largest cryptocurrency by market capitalization spent the next three days of the week losing all the gains incurred. By Friday, October 30th, at 8:00 UTC, Ethereum was trading at a low of $373.40, representing a 9.32% correction from the weekly high. While investors were concerned about a steeper correction, it seems like the 200-day simple moving average on the 4-hour chart was able to keep falling prices at bay.
Given this trend-following indicator’s strength, Ether rebounded 2.62% and closed on Friday, October 30th, at $383.20. As a result of the downward price action, Ethereum investors incurred a weekly loss of 5.69%.
Further Volatility Ahead
The upcoming U.S. presidential election is estimated to bring higher levels of volatility to the cryptocurrency market. Many analysts argue that a win by the Democratic party will negatively impact the stock market, which may spill over to crypto. Nonetheless, historical data shows that Bitcoin has been able to recover quickly in the previous presidential ballots.
For instance, the bellwether cryptocurrency took a 20% nosedive approximately two weeks before the election in 2012. But a few days later, it recovered and resumed its uptrend. A similar price action took place in 2016 as BTC dropped nearly 12% five days before the U.S. election to then rebound towards higher highs.
Now that the market is still assessing the impact of the supply shock Bitcoin experienced after its halving, history may repeat itself. On-chain data shows that both BTC and ETH sit on top of massive supply barriers that may have the ability to absorb any downward pressure. Therefore, the odds currently favor the bulls.
Executive Director at CEX.IO