Bitcoin’s current valuation aligns closely with its price levels before the past two US elections, suggesting that the crypto could be primed for growth if a favorable post-election catalyst surfaces, according to CryptoQuant’s latest report.
Historically, Bitcoin has rallied after the US presidential elections, posting significant gains by the end of each election year — 98% in 2020, 37% in 2016, and 22% in 2012.
In 2024, Bitcoin is fairly valued at around $67,000, hovering just above the “realized price,” or the average cost basis for all current holders, which is a sign of healthy demand and room for further price increases.
In recent months, Bitcoin demand has accelerated markedly, growing at a pace of 248,000 BTC per month, the fastest rate since April. However, while global demand surges, there is a disconnect among US investors, who appear to be sitting out this wave of growth.
The negative Coinbase premium — reflecting lower US demand compared to global trends — has been consistently in the red since early October, indicating that American buyers remain cautious.
Profit-taking and reduced leverage
CryptoQuant’s analysis showed that while Bitcoin prices recently spiked from $60,000 to $73,000, the rally was quickly tempered by profit-taking, leading to a correction rather than a speculative buildup.
Instead of new short positions, this price decline was driven by traders who opted to secure gains after a 20% price increase from early October. This profit-taking trend led to a significant reduction in open interest in Bitcoin futures markets, removing around $4 billion in leveraged positions.
This indicates that traders are preparing for potential volatility in the wake of the US election, choosing to de-risk their positions rather than extend into new long bets.
Exchange activity further supports this cautious approach. Daily Bitcoin inflows into exchanges currently stand at 45,000 BTC — well below the 2024 peak of 95,000 BTC observed in March and the 73,000 BTC inflow rate before the 2020 election.
Reduced inflows are generally seen as a sign of decreased selling pressure, which suggests that the recent price dip may not indicate broader market weakness but rather a strategic rebalancing by investors. The report suggested that this conservative posture may continue unless American interest is revived, which could act as a stabilizing force in the market.
Growing demand outside the US
The report noted that demand for Bitcoin outside the…
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