Bitcoin open interest has dropped significantly. This shift indicates a cautious approach among traders. According to Coinglass, some long and short positions have been closed ahead of the US election. It means that traders are preparing for potential volatility. This has made many people to secure their profits due to the dilemma that has been occasioned by this election. They are also limiting their contact with risk.
Election Season Expected to Bring Bitcoin Price Fluctuations
At the moment, Bitcoin is at $68,848 which is 0.51% up in the last 24 hours. However, this minor increase indicates that there are still some investors who are bullish. However, the overall mood in the market varies, which can be explained by the fact that it is still in progress.
Therefore, in the forthcoming years, most analysts have agreed that the price of Bitcoin will be volatile no matter which party comes to power. This is a usual practice during major political activities. Traders anticipate oscillations that may be like a ride in a theme park’s famous roller coaster.
Market Outlook Shifts as Election Nears, Affecting Bitcoin Sentiment
Besides, the election results may cause more buying or selling pressure. The market reactions could be equally fast and sharp if it was to believe such a report. Hence, a number of traders are following the situation closely.
However, reference to the history shows that the elections influence market outlook. In the previous cycles, the price of Bitcoin has response sharply in response to political shifts.
Ultimately, the current drop in open interest is a result of a defensive strategy. This is evident when it nears the election period; most participants know and expect that there are going to be drastic changes in the price. The environment continues to be unpredictable, which contributes to the volatility.
