When the US stock market opened on November 3, the price of Bitcoin (BTC) rose by 2% in just 30 minutes. In premarket trading, the Dow Jones Index rose by more than 350 points on the day of the US election, causing great volatility.

The four reasons that may cause Bitcoin to rise in the short term are more elections, rising stocks, insufficient funds and exchange rate outflows.

Choice leads to hesitation
Today, the United States holds elections, but the results of the elections have not been determined in advance. According to opinion polls, Joe Biden is playing a leading role in the hesitant major states.

Bitcoin’s choice is positive for two reasons. First, according to industry data, the victory of Biden or Trump will benefit BTC in the short term.

Tyler Winklevoss, CEO of Bitcoin Exchange Gemini said:

“Both parties are passionate about the Fed’s money printing press, so no matter who wins the election, #Bitcoin is the only long-term and long-term winner.”
Tom Lee of Fundstrat Global Advisors said the stock could rise by 10% to beat Biden. In this case, the risky assets are likely to recover on their own and ultimately benefit Bitcoin. However, if Trump wins, Lee said, the stock may rise even more, from 15% to 17%.

At the same time, earlier this month, Goldman Sachs issued a report stating that “the blue tide is likely to prompt us to update our forecasts.” Although experts disagree with the possible impact of the election on the stock market, by the end of the year, these two scenarios seem to be Both are good for BTC.

U.S. stock market recovery coincides with BTC recovery
With the Dow Jones Index rising 350 points in the preliminary market, BTC rose from $13,500 to $13,730 in 30 minutes.

Although the correlation between Bitcoin and US stocks has declined in recent weeks, there is an upward trend, but Bitcoin and stocks may rise at the same time. Although Bitcoin can be regarded as a storage tool, Bitcoin and stocks are still risky assets.

The rising stock market may mean that the market is not clear about the final winner of the election.

Short-term seller caught
When the sudden Bitcoin boom hit, the financing rate of Binance Futures’ BTC futures was below 0%.

Cryptocurrency futures implement a mechanism called “financing,” which rewards a few people in the market. If the number of short customers exceeds the number of buyers or long-term owners, the seller must pay the customer a commission every eight hours.

However, when the price of bitcoin rises and provides more incentive to buy long or long bitcoins, there may be a brief tightening. Considering that BTC rose by 2% in one hour, the dominant cryptocurrency has shrunk significantly.

Increased exchange traffic
According to the online market analyst CryptoQuant, the stock market’s outflow reached its highest peak this year, at approximately 30,000 BTC.

When traders want to sell their shares, they deposit them on the Bitcoin exchange. Therefore, when the stock market leaves the stock exchange, it means that traders, whales and retail investors want to hold their BTC shares for a longer period of time.

Short-circuit, election uncertainty, stock market rises and increased stock outflows have all led to a sudden recovery of BTC.

Source: CoinTelegraph