Bitcoin investors should brace for a potential price pullback leading up to the US presidential election on November 5th, followed by a period of heightened volatility, according to Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered. Despite a recent surge to $73,563 on Tuesday, Bitcoin remains stubbornly below its all-time high of over $73,700 set in March.
Kendrick suggests that investors liquidating positions ahead of the election could exert downward pressure on the cryptocurrency’s price, making a breakout above its historical peak less likely in the near term. “There is a risk of pre-election position unwinding, meaning that we are more likely to be lower than $73,000 than higher, come election day,” Kendrick stated in a research note published Thursday.
The anticipation of potential delays in election results is also contributing to market volatility. Kendrick observes a growing premium for seven-day Bitcoin options compared to 30-day options, reflecting the uncertainty surrounding the immediate post-election period. “This is due to the chance that it takes a few days to get full election results,” he explained, drawing parallels to the volatility witnessed in early January preceding the launch of spot Bitcoin exchange-traded funds (ETFs). He further noted the options market’s historical accuracy in predicting volatility around significant events, suggesting a similar pattern may emerge around the election.
While a pre-election dip is anticipated, Kendrick also outlines a scenario with significant upside potential. A Republican sweep of Congress, he argues, could propel Bitcoin to a staggering $125,000 by the end of the year, potentially igniting a renewed surge in altcoin prices. “We think a Republican sweep would be especially helpful to Solana in this regard,” Kendrick added.
