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Bitcoin Volatility Slows as Traders Await U.S. Election: Bitfinex

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Bitcoin Volatility Slows as Traders Await U.S. Election: Bitfinex

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By TheCoinrise Media

5 months ago

•

3 mins read

Bitcoin Volatility Slows as Traders Await U.S. Election: Bitfinex

Big Post-Election Moves Anticipated
Altcoin Market Lacks Momentum as Bitcoin Dominates

With the U.S. election just around the corner, Bitcoin volatility has taken an unexpected dip. Bitfinex analysts, in their November 5 market report titled “Calm Before the Storm?”, have noted that Bitcoin’s implied volatility has dropped to the low 40s. This dip suggests that traders are reluctant to place high-stakes bets on the cryptocurrency’s movement until the election’s outcome is clearer.

Notably, Bitcoin’s forward-looking volatility index, provided by Deribit, reached a three-month high of 65.7 on November 3, only to fall back to 63.2 shortly thereafter. This softening has coincided with a drop in Bitcoin open interest on CoinGlass, with traders rapidly closing both short and long positions.

Bitfinex analysts have suggested that despite the general anticipation for elevated volatility around election time, many market participants are exercising caution, adopting a “wait-and-see” approach.

Big Post-Election Moves Anticipated

Despite this current lull, analysts at Bitfinex still anticipate a substantial post-election shift in Bitcoin’s volatility. A sudden volatility spike could trigger major price moves, but there’s also the possibility that a lack of significant movement might signal an impending correction for Bitcoin on shorter timeframes. Some traders have already voiced their expectation for Bitcoin to swing by “at least” 10% in either direction depending on the election outcome.

This wait-and-see sentiment isn’t unique to Bitcoin. The report also highlights that with Bitcoin dominance reaching a high of over 60%, interest in altcoins has noticeably waned. Altcoins, including Ethereum and Solana, have seen considerable price drops, and sentiment around these assets has dulled as Bitcoin continues to pull in most of the crypto market’s capital.

Altcoin Market Lacks Momentum as Bitcoin Dominates

As Bitcoin absorbs the bulk of market interest, Bitfinex analysts observe a notable “apathy” in altcoin markets. Both Ether and Solana are experiencing drawdowns of around 12% from recent highs. According to Bitfinex, without a fresh catalyst, altcoins may struggle to rebound in the near term.