- Crypto volatility intensifies as the U.S. election approaches.
- The relief rally has reversed, pushing Bitcoin below the key $60k threshold.
- This shift coincided with Kamala Harris opening a significant lead over Donald Trump.
Bitcoin’s notorious volatility took center stage last week as the cryptocurrency market experienced significant turbulence. The world’s leading digital asset plummeted to $49,000 amid growing macroeconomic and geopolitical concerns, only to stage a bounce back in the following days.
However, the relief rally proved short-lived as Bitcoin struggled to maintain its momentum over the weekend as Kamala Harris surged ahead of Donald Trump in the election polls. The cryptocurrency slipped below the psychologically important $60,000 mark on Sunday, signaling a potential return to a new bear cycle.
Is the Bitcoin Bull Intact?
Sunday marked a turning point for Bitcoin’s recent relief rally, with the cryptocurrency recording a 6% downside swing to close the day at $58,700. This coincided with Harris opening up a significant lead over Trump in the presidential race.
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The downward trend persisted into Monday, as BTC reached an intra-day low of $57,700 at publication.
This sharp reversal has rekindled fears of a potential bear market following last week’s significant crypto crash. Despite growing concerns about a bear market return, some industry figures remain optimistic that the bull market will remain intact.
Vivek Sen, founder of Bitgrow Lab, drew parallels with historical trends from 2014-2017, suggesting that the current market behavior could precede a strong rally. He referred to this phase as ‘the bull run, part 2,’ aiming to frame recent price movements within a broader historical context.
Adding to the mixed market sentiment, CryptoQuant’s Bitcoin Bull-Bear Indicator briefly entered bear territory after last week’s crash. However, CryptoQuant founder Ki Young Ju noted that the indicator quickly shifted back to bull territory within just three days.
While Sunday’s relief rally reversal coincided with Democrats gaining ground in the election polls, it’s important to note that Bitcoin’s price is influenced by many other factors, such as the ongoing yen carry trade situation.
Harris Surges Ahead of Trump
Presidential hopeful Harris surged ahead of Donald Trump in the election polls on Sunday, coinciding with Bitcoin’s drop below $60,000. According to Polymarket, Harris gained a 7% lead over Trump, with the prediction market giving Democrats a 52% chance of victory, while Republican odds fell to 45%.
Harris’ lead marked a significant shift from last Friday when the two candidates were virtually neck and neck, with Harris holding a slim 1% lead.
During his election campaign, Trump positioned himself as the ‘Crypto President,’ promising a range of pro-crypto initiatives, including mining support and discussions about establishing a national BTC reserve.
However, in recent weeks, Democrats have intensified their efforts to connect with the digital asset community, opening dialogue with industry executives to repair previously strained relationships.
Nonetheless, given the history of unfavorable events during the Democrats’ tenure, some within the crypto industry remain skeptical about their recent pro-crypto stance.
Doubts on Democrats’ Pro-Crypto Flip
The crypto industry’s reaction to the Democrats’ pro-crypto shift has been mixed. Angel investor Balaji Srinivasan voiced skepticism about the sincerity of this pivot, noting that the current administration has yet to take tangible steps to support the industry, such as dropping proposals to tax unrealized gains.
Charles Hoskinson, CEO of Input Output, echoed these sentiments, dismissing the Democrats’ attempts to reset relations with the crypto industry. He even declared, ‘A vote for Harris is a vote against the American crypto industry.’
The ‘Crypto for Harris’ advocacy group is working on changing the perception of the Democrats as the anti-crypto party.
On the Flipside
- Short-term price moves are unreliable indicators of the long-term trend.
- The Democratic National Convention starts on August 19 to 22 in Chicago.
Why This Matters
As Bitcoin’s price fluctuates with political tides, investors are reminded of the deep connection between the crypto industry and the broader economic and political landscape.
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