Originally published on: November 04, 2024
Bitcoin experienced a 6.7% decline from October 31 to November 4, dropping below the $67,500 mark for the first time in over a week. This downturn resulted in the liquidation of $190 million in leveraged long positions, coinciding with the uncertainty surrounding the United States presidential election on November 5.
Despite this temporary bearish trend, three key derivative metrics suggest that the Bitcoin market remains steady. Top traders on exchanges have maintained a long-to-short ratio, aggregate BTC futures open interest has remained stable, and there is continued demand for stablecoins in China.
Market confidence is evident in the aggregate spot and futures positions held by whales and market makers on Binance and OKX. Even with the recent dip in price, there is no sign of weakness in this indicator, indicating a positive outlook for Bitcoin’s price recovery.
However, there is caution among traders to pay above $70,000 due to concerns about potential regulatory scrutiny under a Democratic administration. The unclear stance of Vice President Kamala Harris on cryptocurrencies has contributed to this uncertainty, as traders fear it could lead to restrictions on the integration of cryptocurrency with traditional finance.
While former President Donald Trump has shown more support for Bitcoin, his specific plans for encouraging adoption remain unclear. Regardless of the election outcome, investors are hesitant to push Bitcoin’s price to new highs in the current environment of uncertainty.
Despite these concerns, professional traders are increasing leverage positions, as evidenced by the stable Bitcoin futures open interest and the relative value of the USD Tether stablecoin against the USD/CNY rate in China. These metrics suggest a moderate bullish sentiment in the market despite recent fluctuations in price.
Overall, the Bitcoin market appears resilient, with no signs of stress according to derivative metrics. Traders remain confident that the bull market will resume once the uncertainty surrounding the presidential election subsides.
