On Thursday (October 31), Bitcoin maintained a bullish trend at $72,400, but the price failed to break through $73,000 firmly. The flat financing rate and the absence of retail investors caused investor panic. Fortune magazine quoted researchers as saying that Polymarket, a large cryptocurrency betting platform, showed that former President Donald Trump's chances of winning the November election were close to 67%, suspected of false wash trading.
Cryptocurrency circles bet heavily on Trump's victory. Polymarket is involved in fake wash trading
Fortune magazine reported that Polymarket quickly rose to mainstream popularity during the 2024 US election. The platform reported that users had bet $2.7 billion on whether Trump or Vice President Kamala Harris would be elected president in early November.
However, analysts from two cryptocurrency research firms found rampant wash trading on Polymarket, despite its odds being widely circulated on social media and mainstream media. According to the platform, Trump's chances of winning at one point approached 67%.
In surveys conducted by blockchain companies Chaos Labs and Inca Digital, analysts found that Polymarket activity showed signs of wash trading, a form of market manipulation where stocks are bought and sold, often simultaneously and repeatedly, to create the illusion of volume and activity.
According to reports, Chaos Labs found that wash trading accounted for about one-third of Polymarket's presidential market trading volume, while Inca Digital found that a "significant portion of the market's trading volume" could be attributed to potential wash trades.
Since a key court ruling in September legalized election betting, other prediction markets, including Kalshi and Robinhood, have launched in the U.S., but Polymarket remains the largest platform to date, partly due to its crypto-native design and offshore operations.
Polymarket remains closed to U.S. investors; nonetheless, with less than a week until election day, suspicious activity on Polymarket has raised questions about the site's accuracy, with its 26-year-old founder Shayne Coplan claiming the site can "unveil the mysteries of the events that matter most to you in the real world."
"Polymarket's terms of use explicitly prohibit market manipulation," a Polymarket spokesperson said in a statement shared with Fortune magazine after the article was published. "We strive to provide users with the fairest analysis possible, and our transparency allows the market to make decisions for itself."
Trump has explicitly expressed support for cryptocurrencies, vowing to make the U.S. a cryptocurrency capital, and even suggested establishing a national Bitcoin reserve after winning the election. Republicans hinted that a Trump victory would "cleanse" regulatory agencies.
Bitcoin not breaking $73,000 is "frightening"
Bitcoin's price started to cool after reaching $73,500 on the cryptocurrency exchange Bitstamp on Wednesday (multiple exchanges BTC/USDT did not break $73,000), with traders welcoming the consolidation, seeing it as an opportunity to solidify the newly reclaimed support level; however, the consolidation still keeps Bitcoin stable between $71,000 and $72,000.
"Bitcoin has now broken above all major lows since the start of the year, except for the historical high, it's close to the historical high but hasn't been able to surpass it," noted prominent trader Daan Crypto Trades in his latest post.
"To be honest, it's better to reject before reaching equal heights rather than clearing them. This way, it's more likely to reach the same height at another point."
By analyzing the weekly time frame, trader and analyst Rekt Capital states that the weekly closing price will provide key information about the strength of Bitcoin's latest trend.
He continued, "Bitcoin has the potential to generate an upward trend beyond the high points of the re-accumulation range." He was referring to the spot price range since the historical high in March.
"This week is still in the early stages, so a lot can change. Bitcoin needs a weekly closing price above the range high to initiate a breakout."
Meanwhile, trading firm QCP Capital attempts to assess Bitcoin's performance so far while acknowledging that due to factors like geopolitical and macroeconomic tailwinds, Bitcoin has the potential to continue rising.
The company summarized in its latest announcement to Telegram channel subscribers, "These days, Bitcoin's price movement is very remarkable, rising over 8% and breaking through the $73,000 level. Strong inflows into spot ETFs, a new round of monetary easing from major economies, and the increasing chances of crypto-friendly presidential candidate Trump are all positive catalysts."
The agency added that upcoming U.S. unemployment data, the Federal Reserve's interest rate decision, and the earnings of tech companies may also further influence market dynamics.
Comparing the current market environment to the breakout above $73,000 in March, some observers can hardly emphasize the differences.
Notable commentator Byzantine General wrote, "Bitcoin is essentially at historical highs, these are the funding rates. If you had told me a year ago that the funding for ATH would be neutral, I wouldn't have believed you."
Data from monitoring resource CoinGlass confirms that currently, the funding rates are only slightly positive, while the world's largest cryptocurrency exchange Binance is nearly neutral.
Cryptocurrency analyst Miles Deutscher continues to point out that retail consumer interest in cryptocurrency trading is relatively lacking, as evidenced by the popularity of the app (APP) of the largest U.S. exchange, Coinbase, on the Apple Store.
He summarized on Twitter: "The price is exactly the same, but retail is nowhere near recovery. We will go higher, and that's frightening."
