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Bitcoin underwent a noticeable downward correction afterwards [almost] hitting $ 16,000 on Friday last week.
The collapse followed a massive rally that began during the US presidential election season. Traders anticipated that a decisive political challenge would pave the way for a second pending coronavirus bill. As a result, people will start shifting their capital from anti-risk currencies to anti-fiat assets.
Bitcoin benefited from global market sentiment as it acted as a hedge against the US dollar. Cryptocurrency offers have increased with the fall of the greenback. And a confirmed win for Joe Biden, the Democratic candidate who vowed to expand government spending programs against the coronavirus pandemic, has further raised the prospects for a higher Bitcoin.
This week
The US election results came with their share of political drama. Acting President Donald Trump has filed a lawsuit in his attempt to contest election votes for Mr. Biden. It has brought some uncertainty to the financial markets as states score more votes in the days to come.
Meanwhile, the Senate in Georgia is also trying to move towards a ballot. Experts note that the final result will not arrive until early January. They also think Republicans will keep a majority in the Senate House. It would mean delays for Mr. Biden in approving the expense accounts he promised in his election campaign.
For Bitcoin traders, it is now a question of when not if. The growing number of coronavirus cases in the United States has raised the possibility of a second relief package. No politician can ignore the American public as their states enter partial or full blocs as in European countries. Eventually a package will arrive.
If Trump wins, fewer blocks, the economy gets better, #Bitcoin wins
If Biden wins, stimulus and increased government spending cause prices to rise. #Bitcoin wins
If Jorgensen wins, smaller government, more freedom, #Bitcoin wins
If Pierce wins, we have a Bitcoiner president, #Bitcoin wins
– Bruce Fenton (@brucefenton) November 3, 2020
Expectation is the only bullish exercise an average Bitcoin trader can do.
Meanwhile, those with restless short-term risk appetite would prefer to sell their positions at current higher levels. Faced with lower buying demand in the absence of concrete interim fundamentals, the price of Bitcoin can therefore drop to find a new support base.
Bitcoin Outlook, explained
There are no influential market events this week between Monday and Wednesday. On Thursday and Friday, however, the market can expect some volatility as authorities release reports on the consumer price index, initial jobless claims and consumer confidence regarding the US economy.
Meanwhile, the Federal Reserve will keep interest rates close to zero and the stimulus will remain in a dead end. This leaves Bitcoin traders ample reasons to secure their short-term cash profits.
Bitcoin shows signs of correction after almost hitting $ 16,000. Source: BTCUSD on TradingView.com
The fundamentals adapt to technical bias. Bitcoin continues to remain within an overbought territory which equates to a further downward correction. If so, the BTC / USD exchange rate is looking in the $ 13,500- $ 14,500 area to offer support. Any extended fall below the range would bring support at $ 10,500 in sight.
Bitcoin has risen 113% over a period of time since the beginning of the year.
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