In 2014 and 2018, the US midterm elections were followed by steep drops in the crypto market. Will the same situation happen this year as well? It is not certain.
In 2014 as in 2018, crypto prices crashed right after the US midterm elections. However, several signs indicate that this time will be different.
These signals are mainly related to the total capitalization of the crypto market. In addition, prices could turn bullish if the Republicans were to win a majority in the House and/or the Senate. Indeed, these are generally considered crypto-friendly. The same can be said for a possible presidential candidacy of Donald Trump in 2024.
Either way, the crypto market has gone down over the past 24 hours. Knowing that today is election day, it is interesting to examine the movement of prices and determine the reasons for this phenomenon.
Bitcoin Price Holds Above Its Support
Bitcoin (BTC) has been holding above the $19,000 horizontal support zone since June 2022, which it has validated on numerous occasions. Throughout this period, the weekly RSI generated a bullish divergence (green line). Despite the current price decline, the weekly RSI trend remains intact.
Thus, the trend can still be considered bullish, since BTC price is trading above the major support zone and the RSI divergence is intact. A drop in the RSI and a weekly close below the $19,000 area would be needed for the trend to turn bearish.
The key areas for a fall or a price advance
Technical analysis of the daily chart shows that Bitcoin price is moving inside an ascending parallel channel. Having failed to break above this channel on November 5, it returned to its support line.
Additionally, the daily RSI is just holding its bullish divergence trendline, which has been in place since September 5th. A passage below these levels could accelerate the downward movement.
Thus, the direction of the future trend will likely be determined by whether the BTC price falls below its channel, dragging the RSI with it, or on the contrary it reverses and regains the $21,470 area (green line ).
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