Bitcoin (BTC) Breaks $65K, as Price Action Compared to Prior U.S. Election Cycles

Trading firm QCP Capital said the move was similar to BTC's price action in 2016 and 2020 before the U.S. elections.

Bitcoin price rose to above $65,000 during U.S. morning trading hours on Monday, as the S&P 500 index opened at a new high. Some traders believe that historical price patterns observed ahead of previous U.S. presidential elections could provide a reason to be optimistic heading into November's upcoming vote.

According to data, BTC increased by 4% over the last 24 hours, while the broad-based CoinDesk 20 (CD20), a liquid fund that tracks the largest tokens, saw a 3.1% gain.

At the opening, the S&P 500 rose by 14.8 points, or 0.25%, to 5,829.81, ahead of a week filled with corporate earnings and economic data, as reported by Reuters.

Since the early Asian hours on Monday, BTC has rallied from $62,000 to $65,000, liquidating over $80 million of BTC and ether (ETH) leveraged shorts, which are bets against the tokens. This early move was driven by renewed hopes of a future stimulus for Chinese markets, which tends to drive up riskier assets, including cryptocurrencies.

Trading firm QCP Capital noted that this move is reminiscent of BTC's price action in 2016 and 2020, ahead of the U.S. elections.

“If we look back to 2016, BTC traded in a very tight range for over 3 months,” QCP traders stated in a broadcast message. "It wasn't until three weeks before U.S. Election day that BTC began its rally from $600 and finally doubling its price by the first week of January.”

“Similarly, in 2020, BTC was stuck in a boring range for half a year and only started rallying from $11K just three weeks before U.S. Election day, reaching a high of $42K by January,” they added.

“Today's rally has definitely given the market a glimmer of hope just as Uptober optimism was fading,” the traders said, referring to October’s historically bullish seasonality.

Since 2013, October has only ended in the red twice, notching gains as high as 60% and averaging 22% to become the best month for investor returns. However, over the last two weeks, prices have remained largely stable, dampening investor hopes.

The bitcoin price stood at around $63,330 on Sept. 30, indicating that the largest cryptocurrency is up only slightly on a month-to-date basis.

According to a CoinDesk analysis, most gains in October tend to occur in the second half of the month, with price jumps of up to 16% typically appearing after Oct. 15.