Bitfinex released a report on November 4th stating that after eight months of volatility, Bitcoin almost broke through its all-time high last week but then suffered a violent correction. The rebound was initially driven by the “Trump deal” narrative but was later undermined by uncertainty over the outcome of the US presidential election, reflected in the Bitcoin options market.
The market generally viewed a Republican victory as positive for Bitcoin, while the prospect of a Democratic victory appeared murkier. The average odds of Trump winning have dropped from 64.9% to 56%. In the options market, implied volatility for contracts approaching expiration was unusually low ahead of Election Day, suggesting investors are waiting on the sidelines, waiting for clarity.
A surge in volatility is expected between November 5 and 8, which could trigger significant moves in the market; a failure to do so could signal deeper caution in the market. There has also been a chill in the altcoin market, with Bitcoin’s market dominance exceeding 60%, setting a new cycle high.
Whenever Bitcoin pulls back, altcoins face serious losses. Ethereum and SOL are both down around 12% from recent highs, with Ethereum down 40% since the initial ETF rally. The speculative interest that once underpinned altcoins appears to have evaporated, reflected in stable funding rates and subdued overall market sentiment.
With Bitcoin absorbing the majority of inflows into crypto assets, altcoins struggle to keep up, and without new catalysts, their prospects for a near-term recovery appear slim. Even amid last week’s pullback, Bitcoin’s overall resilience since September’s lows is noteworthy. Current market dynamics point to a very compelling week ahead, whether you are a trader, investor, or casual observer.
The road to Election Day is bound to be anything but ordinary.
