How high can Bitcoin price go ahead of US elections?

Bitcoin (BTC) may have hit a local bottom during the global market crash on August 5, when the price fell to around $49,500, the lowest in about six months.

This potential floor is consistent with the historical pattern observed in the last US presidential election, where Bitcoin consistently hit local lows in the third quarter, usually in July or August.

Could Bitcoin Reach New All-Time Highs Before the Election?

Technical analyst SuperBro highlighted that Bitcoin has experienced strong upward momentum since hitting its Q3 lows in 2012, 2016, and 2020, often rallying to new highs after the US presidential election.

Given this historical precedent, expectations are growing that Bitcoin will see another uptrend as the November 2024 election approaches, with a fierce contest between Donald Trump and Kamala Harris.

SuperBro reinforced his bullish view on Bitcoin by mentioning the “left-handed cycle” theory, which posits that Bitcoin’s bullish cycle may start earlier than the previous cycle and potentially reach an earlier peak.

The main piece of evidence supporting this theory is that Bitcoin’s most recent peak occurred just over a month before the fourth halving in April 2024. This is unusual compared to past cycles, where peaks usually occurred after halvings.

If the left-shifted cycle holds, Bitcoin could start to rally before traditional market participants expect it, perhaps hitting a new all-time high before the election. This could make the “middle curve” less cautious, i.e., those who are slow to adapt to changing market dynamics.

As a result, these investors may get squeezed out if they wait too long and miss the early stages of the rally.

Essentially, Trump’s positive stance on Bitcoin and potential regulatory changes under each administration could fuel speculative buying, further accelerating the price increase.

Trump’s odds of winning have increased, according to cryptocurrency betting service Polymarket.

Bitcoin On-Chain Data Signals Declining Profit Realization

According to Glassnode’s latest weekly report, long-term Bitcoin holders (LTH) have been consistently securing around $138 million in daily profits during the recent flat trend.

This consistent profit taking suggests that significant amounts of capital are flowing into the market each day to absorb selling pressure, which keeps the Bitcoin price relatively stable despite the volatile environment.

Meanwhile, the realized P&L ratio, while still high, shows signs of declining significantly from its peak, suggesting that LTH is starting to reduce its profit taking activities.

Historically, this indicator has reached high levels when the market has reached its peak and then declined before the market resumes its uptrend. This can be seen in the 2013 and 2021 cycles.

The declining realized P&L ratio combined with the historical trend of LTH suggests that Bitcoin could rally in the months leading up to the election.

Bitcoin bullish flag points to $80K

From a technical perspective, Bitcoin could potentially experience a bullish breakout ahead of the US presidential election.

BTC price has been trending inside a bullish flag pattern since March, which was confirmed by a correction inside a descending parallel channel, which in turn followed a strong uptrend.

Typically, this formation increases the likelihood that Bitcoin will continue its bullish momentum, given that the price of Bitcoin decisively breaks above the upper trendline of the flag. When this happens, the bullish flag breakout target is measured by adding the previous uptrend’s high to the breakout point.

relevant: Two Key Bitcoin Indicators Show Steady Bullish Cycle – ‘No Bubble’ in sight

Then, Bitcoin’s bullish flag target would be around $80,000 by the time of the US presidential election in November.

This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.