Bitcoin Shows Mixed Signals on US Election Eve Amid Whale Accumulation and LTH Sales

Bitcoin is again in a very decisive position, showing both promising and cautionary signals on the eve of the U.S. election. 

Recall that a surge last week saw Bitcoin jump to $73,600 on Oct. 29, marking a seven-month peak before a swift correction pulled it down below $68,000 by Nov. 3. Despite the decline, major market indicators point to ongoing interest and potential volatility.

Bitcoin Market Healthy Amid Whale Buys and LTH Sales

In the derivatives markets, there are encouraging signs of stability. Traders are holding their positions, steering clear of excessive leverage, which suggests a healthier, more sustainable trajectory for Bitcoin compared to past speculative booms. 

A notable metric, the 25% delta skew, remains stable. This figure typically rises sharply above 7% in times of market panic, indicating that, as of now, options traders are not bracing for a major price drop.

Meanwhile, activity from large Bitcoin Whales continues to shape market sentiment. According to CryptoQuant data, whale holdings have risen, increasing from 3.889 million BTC on Oct. 20 to 3.915 million BTC currently. This uptick suggests confidence even amid recent market fluctuations.

While whales accumulate, long-term holders (LTHs) are taking a different approach, showing a noticeable uptick in selling. Over the past week, LTHs have offloaded around 177,617 BTC, according to CryptoQuant analyst JA Maartun. 

Bitcoin Long-Term Holders (🔵) Sold 177,617 BTC in the Last 7 Days

This chart displays Balance Changes by Time Held, offering insight into the movement of older Bitcoin. These older coins, referred to as Long-Term Holders (LTH), typically belong to investors with a long-term… pic.twitter.com/wiCVdIbf9e

— Maartunn (@JA_Maartun) November 4, 2024

This behavior syncs with a historical trend where LTHs tend to sell when prices rise, possibly hinting that these holders see current price levels as an opportunity to realize profits. 

This selling trend mirrors patterns observed in previous bull markets, including those in 2018, 2021, and 2024, where long-term holders distributed more Bitcoin during price rallies.

Macro Factors

Bitcoin’s recent price movements have also closely followed trends in the S&P 500, suggesting that macro factors are influencing its price. The upcoming U.S. elections and a potential interest rate cut by the Federal Reserve—forecasted at 0.25%—are possible catalysts for further market shifts. 

A Federal Reserve rate cut could boost Bitcoin’s appeal, as lower interest rates often lead to a search for alternative stores of value, driving investment in assets like Bitcoin.

Bitcoin Shows Mixed Signals as US Election Looms

Adding to the anticipation, some market experts predict Bitcoin could reach new highs following the U.S. elections. Analyst Moustache noted on X that Bitcoin historically has surged after past elections in 2012, 2016, and 2020, speculating that 2024 could follow a similar trend.

#Bitcoin

Don’t forget that $BTC has ALWAYS broken out to new highs AFTER the US elections.

2012-2016-2020.

2024 again?

The elections are tomorrow. pic.twitter.com/cptXpiKUcT

— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖 🧲 (@el_crypto_prof) November 4, 2024

However, as reported earlier today by The Crypto Basic, Aksel Kibar, a Chartered Market Technician, highlighted a potentially bearish formation in Bitcoin’s chart, referred to as a Gravestone Doji. 

If confirmed, this pattern could signal a further pullback. Whether this pattern materializes depends on how Bitcoin closes the current week. A weak close would confirm the doji, but a strong finish could invalidate it, opening the door for further gains.

Despite recent price volatility, some analysts believe Bitcoin is building a solid base around the $69,000 level. They argue that this correction is part of a healthy market cycle and could serve as a foundation for a more significant breakout. 

The idea is that this consolidation phase may prime Bitcoin to surpass its all-time high if buying pressure resumes. BTC currently changes hands at $68,913 as of press time, looking to reclaim and sustain the $69,000 territory before the U.S. presidential election tomorrow.