After the presidential election debate, an influx of new investors into the market – that’s a bullish sign for Bitcoin price
Last night, incumbent US President Donald J. Trump confronted former Vice President and challenger Joe Biden in the first of three debates. The data shows that things got worse for the stock market after each debate, which could be even worse for Bitcoin. This is why the stock market crash caused by the dismaying debates could also mark Bitcoin’s bad news. However, Bitcoin price at the moment is showing the green of hope, hovering around $ 10,843, up almost 6% over the past seven days.
Why could the debate harm Bitcoin price?
Last night, the two top presidential candidates confronted each other. The two did not do anything to calm the minds of citizens nor investors. A “gravelly” path to the election is expected to hit Bitcoin and prevent new all-time highs.
Neither candidate expected a peaceful transfer of power and had questions about the validity of the vote-counting process due to all kinds of problems and chaos caused by mailed votes. Political uncertainty started flooding the markets last night. While Democratic and Republican leaders debated, the stock market skyrocketed, then the moment when the debate ended became tense.
Early signs of reduced selling pressure due to fear and suspicion could be just the beginning of a further decline in Bitcoin and the stock market.
BTCUSD Versus S&P 500 Post-Debate Correlation Chart | Source: TradingView
As depicted in the chart above, the blue line represents the S&P 500 stock market index, which began to decline sharply as soon as the debate ended. Bitcoin’s decline started just before, as the higher-risk asset class may start to feel the pressure of debate sooner. Bitcoin price followed, dropping back down to $ 10,750. But things are a bit better right now.
The two assets that are re-trading are closely correlated as ever. However, there has been constant buzz from the brightest minds of cryptocurrencies expecting the decoupling of crypto assets from the market. Traditional school any day.
But the data shows that after the debate, the market goes down due to the persistent uncertainty about which candidate’s campaign will ultimately win.
According to Ryan Detrick, chief strategist at LPL Financial, the S&P 500 has previously reported a drop in 5-day, 10-day, and one-month intervals after each debate. With only the first of the three debates starting last night, the stock market is likely to go a bumpy ride. And due to its constant correlation with Bitcoin, the high-risk cryptocurrency market could suffer differently.
However, if not, split analysts are calling for it to come true eventually, and Bitcoin shines. Simultaneously, equities rise, possibly just another catalyst driving the cryptocurrency’s next bull market – could appear right after the final election.
The spike in activity coming amidst bearish price action has created a bullish divergence
On-chain analyst Willy Woo explained in a recent tweet that he is witnessing a bullish divergence between Bitcoin’s dwindling price and the uptick in activity amongst new crypto market participants.
He reckons that this is a bullish trend, indicating that upside is imminent for BTC.
“We’re seeing a spike in activity by new participants coming into BTC not yet reflected in the price, it doesn’t happen often. This is what traders call a divergence, in this case, it’s obviously bullish.”
Once this trend does get reflected in Bitcoin’s price, it could help guide it above the upper boundaries of the current ranges it is caught within.
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