Bitcoin Hits a Short-Term Price Peak Ahead of U.S. Elections, Say Analysts

Bitcoin Approaches a Short-Term High

Bitcoin, the largest cryptocurrency by market capitalization, recently hit a local high of over $69,000 but has since pulled back to hover around $66,000. According to analysts from Copper, this drop may signal a short-term price peak, especially with the U.S. presidential election looming on the horizon.

On-chain data indicates that 98% of Bitcoin wallet addresses are now in profit, a significant increase from 75% recently. Historically, such high profitability ratios have led to sell-offs, as investors look to cash in on their gains. Analysts believe this trend suggests Bitcoin is nearing a temporary top, and market sentiment may be cooling off.

ETF Inflows Show Mixed Sentiment

Despite strong inflows into spot Bitcoin ETFs earlier in October—surpassing $21 billion—enthusiasm seems to have waned. After seven consecutive days of positive net inflows, ETFs saw a reversal, with a net outflow of $79 million on Tuesday, primarily from Ark and 21Shares’ ARKB.

While Bitcoin briefly crossed the $69,000 mark, ETF market growth has slowed compared to earlier in the year. Analysts from Copper note that something feels “amiss” in terms of sustained growth, indicating that investors may be cautiously waiting for the next big catalyst—possibly tied to the U.S. elections.

U.S. Elections: A Key Market Catalyst

Both Copper and ETC Group analysts point to the U.S. presidential election as a crucial driver for Bitcoin’s market trajectory. Historically, Trump’s political fortunes have been favorable for crypto markets, and with his chances of winning rising, Bitcoin demand could experience another surge.

In addition to political factors, analysts attribute the increased demand for Bitcoin to broader market trends. U.S. stock markets and gold have recently hit all-time highs, signaling an overall increase in risk appetite. As investors seek safe havens amid concerns over the U.S. budget deficit—which has ballooned by $500 billion since September—Bitcoin is becoming an attractive option for those hedging against fiscal uncertainty.

Rising Demand and the Road Ahead

ETC Group’s analysts highlight several factors supporting Bitcoin’s potential growth in the coming months. These include its limited supply, global monetary policy shifts, and historically positive seasonality in the fourth quarter. With these tailwinds, Bitcoin may find solid support despite its current short-term cooling.

However, the on-chain data showing high profitability suggests that some investors may sell off their holdings before the U.S. election results, creating potential volatility in the market.

Conclusion: Election Uncertainty and Bitcoin’s Future

While Bitcoin may have hit a short-term peak, its future largely depends on upcoming events, particularly the U.S. elections. As on-chain metrics and ETF activity show mixed signals, investors are keeping a close eye on political developments and broader financial trends. Though some short-term volatility is expected, the long-term outlook remains cautiously optimistic as Bitcoin continues to be a haven for those navigating uncertain fiscal waters.