Today, the decline of Bitcoin not only shocked the market, but also made many investors think deeply. The reason behind this wave of decline is closely related to the upcoming US election, especially the decline in Donald Trump's chances of winning, which has become the focus of market attention.
Bitcoin, once considered the "digital gold", now seems to be closely tied to Trump's fate. As Trump's lead in the major prediction markets gradually narrows, Bitcoin traders have begun to reduce their risk exposure, as if preparing for the upcoming election results. This change in sentiment is directly reflected in the price of Bitcoin.
Recall that a few days ago, Bitcoin once hit a high of $73,600, which was the second highest level since 2024. However, the good times did not last long. Just three days later, the price of Bitcoin fell by more than 6.50%, and fell to around $69,200 on November 1. This drop undoubtedly caught many investors off guard and caused the market to fall into a brief panic.
In fact, the decline of Bitcoin is not without warning. As early as when Trump's lead in prediction markets such as PredictIt, Polymarket and Kalshi began to narrow, there were already signs that the price of Bitcoin might be affected. These prediction markets are like huge casinos where users can bet on the results of the election. As a staunch supporter of the cryptocurrency industry, Trump's declining chances of winning have undoubtedly brought considerable pressure to the Bitcoin market.
Bitcoin is widely considered a "Trump hedge," and it's not for nothing. Throughout Trump's campaign, the cryptocurrency industry has invested a lot of money and resources in its interests. Therefore, when Trump's odds of winning declined, these investors and traders naturally became concerned and chose to reduce their holdings of Bitcoin to reduce risk.
Earlier this week, when Trump had a relatively large lead over Democratic candidate Vice President Kamala Harris, the price of Bitcoin was close to its all-time high of $73,794 in March. However, as the election date approaches and Trump's chances of winning decline, the price of Bitcoin has gradually fallen.
Market analyst Horn Hairs pointed out: "In the 2020 and 2016 elections, risk aversion occurred 5-6 days before the election." His words revealed a kind of helplessness and emotion, as if reminding us that the financial market is always full of uncertainty and variables. And this time, the decline of Bitcoin has undoubtedly confirmed this again.
In addition to the impact of the election, the price drop of Bitcoin is also related to its own technical factors. Since the daily relative strength index (RSI) broke through 70 (overbought area) on October 29, the price of Bitcoin has been in a downward trend. This does not mean that the bull market of Bitcoin is about to end, but it does show that this round of rebound may have been overheated.
From a technical perspective, Bitcoin's decline has brought its price back into the current ascending channel range, forming a rising wedge-like pattern. This pattern is often seen as a bearish pattern, indicating that buying momentum may be weakening. Today, Bitcoin's price has fallen below the upper trendline of the wedge, facing the potential risk of falling to the lower trendline (around $68,000).
If BTC price does break below the lower trendline, then according to technical rules, the breakout target of the wedge will be measured by adding the height of the wedge to the breakout point. In other words, if this trend continues, then Bitcoin price could pull back to the $55,500-58,000 area in the last two months of the year.
Faced with such market changes, investors are undoubtedly in a complex mood. Some feel panic and anxiety, worrying that their investment will be lost; others feel fortunate and thankful that they stopped losses in time or chose to wait and see. But no matter what, we must admit one fact: the financial market is always full of uncertainty and risk.
