Bitcoin Bracing for ‘Potential Turbulence’ as US Election Day Nears and USDT Depegs

Bitcoin is approaching the US$70k mark for the first time since June, after a significant rise from August lows.
Bitfinex analysts forecast continued volatility, fuelled by geopolitical uncertainty and the “Trump trade” narrative.
Despite long-term confidence, analysts expect short-term market turbulence as the US election approaches.
USDT has depegged and dropped to 2024 low amid rumours, adding to the turbulence.

It seems Bitcoin is finally breaking out of a trading zone it has been in for much of the past few months. BTC has been rallying from a low US$53,949 (AUS$82,032) in August, to currently US$69,846 (AU$106,218), which would be the first time for BTC to touch the US$70k mark since June.

Bitcoin (BTC), price since February 2024, source: CoinMarketCap

While the trend seems to point up, suggesting the price swings of the past few months are a thing of the past, analysts at Bitfinex believe we’ll see a bit more volatility.

Perfect Storm for Bitcoin is Brewing, According to Analysts

In their most recent market analysis report, they wrote that “driven by a potent mix of geopolitical uncertainty, macroeconomic factors, and the intensifying “Trump Tradeˮ narrative, BTC volatility has intensified”.

Related: Base Achieves Record Stablecoin Volume as Solana Hits All-Time High in Transaction Fees

As a Trump win is largely seen as bullish for risk assets such as Bitcoin, the “correlation between Trumpʼs election odds and Bitcoinʼs upward trajectory has increased”, the report added.

And, as anticipation around the US election is building, the analysts remind us that the fourth quarter of a halving year is usually bullish “with a median quarterly return of 31.34 percent”. Combine the historically strong seasonality effect with currently high levels of open interest and you get a “perfect storm”, according to the Bitfinex analysts.

In summary, the convergence of election uncertainty, the “Trump Tradeˮ narrative, and favourable Q4 seasonality create a perfect storm for Bitcoin, promising an exciting period ahead regardless of noisy price movements heading into the election in two weeks time.

Bitfinex

Although the analysts are confident about the long-term outlook for Bitcoin, they expect short-term volatility to be high, regardless of who wins the election, adding that the “market is bracing for potential turbulence”.

Tether Stablecoin Depegs on Less Than Favourable News

Meanwhile, the largest stablecoin, USDT, is headed for some headwinds. As reported, Tether faced some rumours that US authorities are investigating it, despite its CEO brushing the reports aside calling them “pure speculation”.

And it seems that the news, true or not, had an effect on the USDT price. Analysts at Kaiko report that the rumours about a money laundering and sanctions-evasions probe have led to panic selling of USDT.

This has pushed USDT to its lowest levels this year, with the token depegging to US$0.994.

Cumulative Volume Delta for USDT, source: Kaiko

Coinbase and Kraken saw significant sell orders following the report followed by a collapse in trading activity during the weekend. Interestingly, however, in most fiat markets, USDT saw net buying.