The Bitcoin (BTC) price has suddenly fallen 4% from today’s peak on October 30, when the uncertainty in the stock market became stronger. Five days before the US presidential election, Bank of America or BofA suggested a 20% chance of a fall.

The Dow Jones Industrial Average has been down 7.55% since October 12. The largest stock indices made small gains in the same three weeks as Nasdaq, and fell by 5.8%.

Although the relationship between bitcoin and equities has deteriorated sharply in recent weeks, a decline in risky assets could adversely affect cryptocurrencies.

Will Bitcoin harm risk-free movement in the short term?
According to economists at Bank of America, led by Michael Mayer, the election results are not the biggest threat to equities.

On the contrary, uncertainty can shake the markets regardless of whether there was a controversial choice. The markets can still gather regardless of who wins the election, but a controversial choice can lead to the market falling. Economists wrote:

“A convincing victory for Trump or Biden and a quick end to the election is likely to be welcomed by the markets, while a highly controversial election could lead to risk aversion and push interest rates 10 years to a significant cut.”
It is still difficult for Bitcoin to assess whether a potential extended capital dump will trigger a setback.

Since October 12, while the US stock market indices have fallen 5-6%, Bitcoin has risen in value by around 16%. Over the past 18 days, the price of bitcoin has risen from $ 11,167 to $ 13,290, hitting gold, stocks and the US dollar.

But the bitcoin merger, which faces multi-year $ 14,000 resistance and uncertainty about risky assets, could slow BTC’s growth.

In the near future, according to the Cointelegraph, $ 13,000 will serve a large group of whales. This means that high-wealth buyers are likely to defend $ 13,000 as their main support zone. Given that the previous high for Bitcoin in mid-2019 was $ 14,000, it is likely that the new series will be $ 13,000 to $ 13,900.

If the uncertainty in the market persists after the election, the probability is high that BTC will fall to a $ 13,000 low for a long time, which will not necessarily be unhealthy.

“A correction will not necessarily be detrimental to the bitcoin market at this stage, as it could lead to further accumulation,” said Michael Van de Pope, an analyst at Cointelegraph Markets, in a recent technical analysis of bitcoin prices. he added:

“Most investors will definitely see a straight line worth around $ 200,000, but that just doesn’t happen.”
Maximum pain for an alternative currency
During October, alternative cryptocurrencies found themselves in awe along with the growing dominance of Bitcoin. When Bitcoin goes too fast in a short period of time, it can hinder the recovery of the cryptocurrency market as it creates a volumetric vacuum.

Sentiment around Bitcoin has risen in recent weeks and months, according to researchers at Santiment. As a result, the Bitcoin Dominance Index has grown steadily, both large and small cryptocurrencies. They said:

“As expected, as the #cryptomarket strengthened its dominance of BTC, sentiment became more positive and other major assets were contracted. Social feeling measures the relationship between positive / negative comments about assets, including volume. “

Source: CoinTelegraph