Bitcoin (BTC) rose 2% in just 30 minutes when the US stock market called on November 3rd. In the pre-market period, the Dow Jones rose more than 350 points on election day in the United States, causing massive volatility.

The four most likely reasons for an uptrend in Bitcoin in such a short period are options, equity rally, negative financing, and higher stock market flows.

Elections cause ups and downs
Elections in the United States today, but the outcome is not inevitable. Polls show Joe Biden is a leader in the big shaky nations.

The choice was positive for Bitcoin for two reasons. First, according to industry data, a Biden or Trump victory would benefit BTC in the short term.

Tyler Winkloss, CEO of Bitcoin Gemini Exchange, said:

“Both political parties depend on the federal money printer, so no matter who wins the election, #Bitcoin will be the only real winner in the long run.”
Tom Lee said Fundstrat Global Advisors shares could increase 10% when Biden wins. In this case, the risky assets are likely to increase, and you will eventually benefit from Bitcoin. But if Trump wins, he tells me stocks could go up another 15-17%.

Meanwhile, Goldman Sachs earlier this month issued a note stating that “the blue wave is likely to push us to raise our expectations.” While experts disagree on the potential impact of the election on the stock market, both scenarios appear to be favorable for BTC by the end of the year.

The recovery of the US stock market coincides with the recovery of Bitcoin
As the Dow Jones rose 350 points in the primary market, the price of BTC rose from about $ 13,500 to $ 13,730 in 30 minutes.

While Bitcoin has shown a decline in correlation with US stocks in recent weeks, BTC and stocks are likely to rise in line with the upward trend. While Bitcoin is seen as a store of value, both Bitcoin and stocks remain at risk.

An increase in the stock market could mean that markets are ambivalent about the ultimate winner in an election.

Card sellers were surprised
As Bitcoin increased, the funding ratio for BTC futures on Binance Futures was less than 0%.

Futures exchanges in cryptocurrencies implement a mechanism called “financing” that stimulates a minority in the market. If the number of card sellers is greater than the number of buyers or long-term contract holders, sellers must pay a commission to the buyer every eight hours.

But when the bitcoin price rises and there is an additional incentive to buy or purchase BTC, a short squeeze can occur. Given that BTC increased 2% in under an hour, the dominant cryptocurrency faced significant short-term pressure.

Stock market flows are increasing
Dividends have increased by nearly 30,000 BTC this year, according to CryptoQuant, a company that analyzes the market in various chains.

Bitcoin exchange flows. Source: CryptoQuant
Traders place bitcoins on exchanges when they want to sell their assets. Therefore, when capital flows from exchanges, it means that private traders, whales, and investors intend to hold their BTC assets for a longer period of time.

The combined factors of reduced spending, election uncertainty, an upward trend in the stock market and increased growth flows contributed to the bitcoin’s spike.

Source: CoinTelegraph