Bitcoin (BTC) continued its recovery on Tuesday, with the price approaching $58,000 by the end of the U.S. trading session. This represents a 1.7% gain in the last 24 hours and a nearly 10% increase from last Friday’s low. Other major cryptocurrencies, including Ethereum (ETH) and Solana (SOL), also posted gains of 1.5%.
The broader crypto market recovery comes amidst the backdrop of the U.S. presidential election. While the upcoming debate between Donald Trump and Kamala Harris is unlikely to address digital assets directly, the contrasting policies of the two parties on cryptocurrency could influence market sentiment in the coming months.
Aurelie Barthere, principal research analyst at Nansen, acknowledged that election-related uncertainty could weigh on crypto prices until November. However, she suggested that if the debate leads to a narrowing of Harris’ lead in the polls, it could offer a brief period of reduced market volatility.
Meanwhile, analysts at K33 Research are pointing to technical indicators that suggest a potential for a significant market rally. The 30-day average funding rates for perpetual swaps has turned negative, an event that has only occurred six times since 2018. “In the past, monthly funding rates hitting negative levels have coincided with a market bottom,” noted K33 analysts Vetle Lunde and David Zimmerman in their Tuesday report.
Historically, when funding rates have flipped negative, Bitcoin has experienced an average return of 79% over the following 90 days. The current situation, combined with the rising open interest in crypto derivatives and an influx of short positions, has increased the market’s vulnerability to short squeezes, which could drive prices higher.
K33’s analysts concluded that the current environment presents “a compelling case for aggressive exposure in BTC” over the coming months.
