Source: Talking about Li and Huai.
The crypto market has never lacked hotspots; almost every so often, a new significant event becomes the focus of attention and discussion. For instance, the key event in September was whether the Fed would announce an interest rate cut, followed by various new wealth creation stories around MemeCoins, and now everyone seems to be concerned about who between Trump and Harris will be elected president. Perhaps once the dust settles from the U.S. election, the market will shift its focus elsewhere and choose new points of interest.
Currently, with the U.S. election about to determine a winner, according to some predictions from foreign media, the preliminary results could be determined as early as November 6 (Beijing time) to identify the new occupant of the White House. Today (November 5), due to the uncertainty surrounding the election results among traders and investors, short sellers seem to have leveraged mainstream media's news to create a dip, with Bitcoin dropping to around $66,800. However, a small rebound occurred shortly after, and as of the writing of this article, Bitcoin's price is $68,000. As shown in the figure below.
In the next couple of days, developments and news related to the U.S. election are likely to continue being a focal point across major media and social platforms. Given the significant differences in views on Bitcoin between Trump and Harris, this will continue to influence the short-term direction of the crypto market. Overall, it seems these uncertainties are causing continuous fluctuations in the short-term market.
So, what might happen next? Let's first compare the historical price changes of Bitcoin:
If we briefly review history, it appears that Bitcoin tends to experience some corrections before U.S. presidential elections. For example, I saw someone in the group share this comparison chart:
In 2016, Bitcoin fell by 10% before the U.S. election.
In 2020, Bitcoin dropped by 6% before the U.S. election.
And this time, Bitcoin has already dropped by 6%. As shown in the figure below.
In terms of trends, the prevailing sentiment in the market was that Trump would win, as he has been seen by many analysts as a 'crypto-friendly' president. If we continue to compare the data from the Polymarket platform, we can find some interesting insights, such as:
Starting from October 6, Trump's winning odds began to rise, and Bitcoin almost simultaneously started to increase.
On October 30, Trump's winning odds peaked, and Bitcoin's price almost simultaneously reached its peak.
In addition, previous articles have shared another interesting historical comparison data, let's continue to take a look:
Bitcoin's first halving (November 2012), U.S. election (November 2012), 5 months later: BTC reached ATH (all-time high) in April 2013.
Bitcoin's second halving (July 2016), U.S. election (November 2016), 13 months later: BTC reached ATH in December 2017.
Bitcoin's third halving (May 2020), U.S. election (November 2020), 12 months later: BTC reached ATH in November 2021.
Bitcoin's fourth halving (April 2024), U.S. election (November 2024), and then?
From this perspective, the U.S. election cycle seems to align quite well with Bitcoin's growth cycle. Of course, historical data cannot be completely relied upon, and we should treat the above data as a set of interesting reference points.
But what if the final result is Harris winning? Will the market directly declare the beginning of a new bear market cycle? How should we respond?
Some analysts believe that if Harris wins, it will certainly be bearish for the crypto market, especially for some altcoins viewed as securities, which are likely to continue facing strict but vague regulation from the SEC, potentially leading to a new round of significant declines.
However, some analysts hold a more optimistic view, believing that regardless of whether Trump or Harris wins, Bitcoin will continue to rise in the medium to long term, and it might even reach $100,000 before the end of this year.
We tend to lean towards the latter view, as we also believe that regardless of who ultimately becomes president, the crypto market cannot directly enter a bear market. We still believe that a new round of strong bull market conditions will emerge in the next six months to a year.
This viewpoint has actually been expressed in some of our previous articles before we discussed this topic. In our view, although the U.S. presidential election is quite important for the market, as new officials often bring new policies, the factors that can directly influence the medium to long-term trends of the crypto market are still the Fed's interest rate cuts, changes in global liquidity (increase in M2 money supply), and the global large-scale adoption of ETFs... among other significant trends and factors. In other words, we believe these broader macro trends are unlikely to undergo major changes.
So if you are very concerned about potential short-term market fluctuations, you might consider doing some hedging operations. And if you are making medium to long-term investment plans, then don't engage in any risky operations now; just wait for Bitcoin's trend to improve.
We continue to maintain our previous advice, managing positions according to individual risk preferences. Large positions should still be gradually allocated to Bitcoin. Meanwhile, small positions can be approached with a mindset of being willing to lose it all for high-risk MemeCoins as needed. Additionally, it seems that the trend for MemeCoins is currently at a phase peak, and we might soon see some narratives rapidly rotating again. As for altcoins, based on discussions in the group, it is worth focusing on the leading projects in popular sectors (or considering sectors that were hot last year but haven't gained traction this year), which I also agree with, as the relative risk tends to be slightly lower.
In summary, as mentioned at the beginning of this article, the crypto market has never lacked hot news or events. Just like how no one seems to care about the Bitcoin halving event anymore, or the sell-off of Bitcoin by various governments, or whether the Fed will start cutting interest rates... Perhaps in a few months, no one will care who the U.S. president is either.
Market hot news or events always seem to appear before retail investors at the most opportune moments. We must not let various news disrupt our plans and strategies. What we should care about is: do you have Bitcoin in your hands now, and is your Bitcoin increasing or decreasing?
