Customary Chartered believes Bitcoin’s (BTC) dip under the $60,000 stage is “regular” and referred to as the latest downturn a shopping for alternative in an investor observe shared with CryptoSlate on Oct. 3.
Based on the lender’s world head of digital property analysis, Geoffrey Kendrick, Bitcoin is at present buying and selling in an “attention-grabbing circularity” the place geopolitical tensions are pushing the value down, whereas the elevated odds of former US President Donald Trump profitable the elections increase post-election prospects for Bitcoin.
Based on Kendrick:
“Danger issues associated to the Center East appear destined to push BTC under 60k earlier than the weekend. Positions just like the 80k name choices highlighted right here and the circularity vis-à-vis Trump chances suggests the dip must be purchased into.”
Not a geopolitical hedge
Kendrick highlighted that Bitcoin has not acted as a secure haven in opposition to geopolitical issues, in contrast to conventional property equivalent to gold, and continues to carry out akin to equities during times of rigidity and uncertainty.
As an alternative, Bitcoin has served as a hedge in opposition to systemic monetary dangers, equivalent to US Treasury sustainability and financial institution collapses just like the one seen in March with Silicon Valley Financial institution. He famous that BTC’s response to geopolitical points stays constant as market volatility rises attributable to uncertainty surrounding the continuing disaster.
Kendrick referred to a Might report by Customary Chartered, during which he assessed that digital property are an extension of the tech sector. Thus, in a state of affairs of instability within the conventional monetary system, equivalent to financial institution collapses, de-dollarisation, and points associated to US treasuries, BTC fares effectively as a hedge.
Nonetheless, Bitcoin has but to match gold’s position as a safe-haven asset throughout instances of heightened political danger, equivalent to the present Center East state of affairs.
Shifting election odds
One of many extra intriguing insights from Kendrick’s evaluation is the influence of the US presidential election on Bitcoin’s worth motion.
Polymarket knowledge confirmed that former President Donald Trump’s odds for the 2024 election improved by 1% over the previous week, whereas Vice President Kamala Harris noticed a 1% decline, successfully making the race a 50/50 contest.
Kendrick pointed to a curious market dynamic the place geopolitical issues overwhelm Bitcoin costs, however a rise in Trump’s electoral odds appears to spice up Bitcoin’s post-election potential. Given Trump’s constructive stance towards the crypto business within the US, Kendrick sees a Republican win as bullish for Bitcoin.
Choices surge
Additional emphasizing the hyperlink between market sentiment and positioning, Kendrick highlighted a surge in Bitcoin choices exercise on Deribit.
Open curiosity for choices with a strike worth of $80,000 expiring on December 27 elevated by 1,300 BTC within the final two days, as illustrated by the chart accompanying his observe. This spike in open curiosity suggests buyers are positioning for a potential restoration in BTC costs by the top of the 12 months.
Regardless of the short-term dangers, Kendrick signaled that the dip under $60,000 may current a shopping for alternative for these betting on a medium-term rebound. The interaction of geopolitical fears and US elections is anticipated to stay a key driver of Bitcoin volatility within the weeks forward.
