The 2024 U.S. presidential election is unprecedentedly tight, with investors adopting a wait-and-see approach, leading to increased volatility in the cryptocurrency market. Industry experts expect that regardless of who wins the next U.S. presidency, Bitcoin is likely to experience violent fluctuations post-election, with swings close to 10%.
In the betting markets predicting election outcomes, the probability of Donald Trump's victory has declined, while the chances of the Democratic camp winning have increased. For example, on the Kalshi platform, Trump's betting odds even briefly fell below those of Vice President Kamala Harris, resulting in a drop in Bitcoin's price and a significant increase in volatility.
Election approaches: Bitcoin and Ethereum volatility soars.
The forward volatility of Bitcoin and Ethereum spiked overnight. According to Nick Forster, founder of Derive.xyz, Bitcoin's volatility has increased from 72.2% to 80.30%, while Ethereum's volatility has risen from 75.4% to 82.92%. Nick Forster wrote:
This rise in volatility reflects that traders are preparing for the election results, which could significantly impact market prices.
He expects that on election night, the probability of significant price fluctuations is as high as 2 out of 3, with Bitcoin's price fluctuating in the range of 'down 8.97% to up 9.85%', while Ethereum's price fluctuation range is between 'down 9.25% to up 10.19%'.
Since last week, Bitcoin's price has fluctuated violently, dropping from a recent high of about $72,600 on October 31 to a low of about $67,500, a decline of 7%, before slightly rebounding to the current price of about $68,700.
There is a 68% chance that Bitcoin will surge to a new high after the election.
If Bitcoin maintains its current price levels, Nick Forster's analysis predicts that Bitcoin has a '68% chance' of rising to as high as $75,400, or dropping to $62,500 post-election.
He further predicts that due to the increase in forward volatility, Bitcoin has a '5% chance' of dropping below $57,000 or rising above $83,000. Nick Forster stated:
The total number of open call options for Bitcoin reached 1,179, compared to 885 put options, clearly indicating that despite potential turbulence, the market still leans bullish.
Since October 30, Ethereum has also fallen more than 9%, with the current quote around $2,460.
According to Nick Forster's forecast, Ethereum has a '60% chance' of surging to $2,700 post-election or dropping to $2,222, while the chances of falling below $2,000 or rising above $2,975 are 5%.
Expected volatility indicators surged to a 3-month high.
Standard Chartered analysts recently predicted that as the U.S. presidential election approaches on Tuesday, cryptocurrency prices will experience high volatility. Additionally, due to the tight race in the U.S. elections, options indicators measuring expected volatility in Bitcoin prices have surged to a 3-month high.
The Bitcoin implied volatility index (DVOL) from the cryptocurrency options exchange Deribit has climbed to an annualized 63.24%, the highest level since the end of July. This index is a key measure of expected price volatility over the next 30 days that investors closely monitor.
Meanwhile, Bitcoin's 7-day implied volatility has surged to an annualized 74.4%, significantly higher than the 7-day realized volatility or historical volatility, which stands at 41.4%. Singapore's QCP Capital analysts stated that this reflects a high risk premium regarding the election.
Will there be no breakout before the U.S. election? Standard Chartered warns: Bitcoin may pull back, and market volatility is inevitable.
"How will Bitcoin move after the U.S. elections? Experts believe there will be 'swings close to 10%'" This article was first published on (Blockcast).
