Home CryptoMarket Post-midterm elections dump? Bitcoin will see $12K if this 2018 BTC chart fractal is correct

Post-midterm elections dump? Bitcoin will see $12K if this 2018 BTC chart fractal is correct

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Bitcoin (BTC) investors may not consider the US midterm elections a significant event, but 2018’s eerie fractal could provide clues to what might happen before the end of the year. There is a nature.

Will Bitcoin Reach $12,000-14,000 After Midterm Elections?

Comparing Bitcoin price action before the 2018 midterm elections to that in 2022 shows a strikingly similar bear market trend.

For example, BTC price trended downwards in 2018, holding a horizontal level near $6,000 as support, but fell below it after the midterm elections.

BTC/USD daily chart featuring 2018 trends. Source: TradingView/Aditya Siddhartha Roy

In 2022, cryptocurrencies will half reflect this trend. The price is waiting for a close below the current horizontal support level of around $19,000. With the midterm elections scheduled for November 8th, sooner or later the collapse scenario described above could occur, as shown below.

BTC/USD daily chart featuring trends for 2022. Source: TradingView/Aditya Siddhartha Roy

Independent market analyst Aditya Siddhartha Roy believes that if a similar breakdown were to occur, Bitcoin’s price would fall in the $12,000 to $14,000 range. He further said that cryptocurrencies could bottom out in November or December 2022, similar to 2018.

Bitcoin stock market warning

A bearish forecast will surface as Bitcoin’s correlation with U.S. stocks has become stronger following the Federal Reserve’s monetary policy. Both markets experienced sharp drawdowns during the 2022 US Central Bank rate hike period.

Historically, in 17 of the 19 midterm elections since 1946, the stock market performed better in the six months after the election than in the six months after the election.

S&P 500 Average Performance in US Midterm Election Year.Source: Charles Schwab

This is largely due to market expectations for increased government spending from the new Congress. Note Liz Ann Sonders, chief investment strategist at Charles Schwab, further argues that 2022 could have a different outcome.

“Given the government’s historic levels of spending and stimulus to respond to the pandemic, an additional injection of funds this year is unlikely,” she explained, adding:

“Unlike previous interim periods, the combination of high inflation, the war in Ukraine, and a protracted pandemic have already shaped this cycle. We don’t put too much emphasis on medium-term results.”

The US money supply is still over $21 trillion.Source: Fred

As a result, Bitcoin is at risk of falling US stocks with a view to a price target of $12,000 to $14,000.

Optimistic BTC price indicator

However, some in the cryptocurrency market see Bitcoin as detached from traditional markets, suggesting that cryptocurrencies may not drive the S&P 500 into a post-midterm election crash. increase.

Stephane Ouellette, Chief Executive Officer of FRNT Financial Inc. said, “At some point, there will be people in the community who believe in BTC for the long term and are very unlikely to sell, and the growth of using BTC for commerce. The market will be dominated by a global community that Said Bloomberg.

RELATED: Bitcoin Sticks at $19,000 as Traders Promise to Surrender

Ouellette’s statement comes after the daily correlation coefficient between Bitcoin and the S&P 500 dropped to 0.08 on Oct. 9, the lowest in four months.

Recent daily correlation coefficient between BTC/USD and SPX.Source: Trading View

Meanwhile, the number of unique addresses holding at least 1 BTC hit a record high on October 17, in contrast to the trend seen during the 2018 bear market. This suggests that investors were accumulating bitcoin during local price declines.

Number of Bitcoin addresses holding at least 1 BTC.Source: Glassnode

“On-chain data suggests that these holders are optimistic that the market will recover and keep market fundamentals relatively healthy.” according to On a note from crypto exchange Bitfinex.

Market analyst Wolfe offered a similar outlook, citing Bitcoin’s extremely oversold Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators on the weekly chart for 2022. I was.

By comparison, these oscillators were in the neutral zone before the 2018 midterm elections, meaning BTC’s price had room to fall.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.