Bitcoin may hit a fresh all-time high before the U.S. election, with a potential target of $74,000, according to Geoff Kendrick, Head of Digital Assets Research at Standard Chartered.
Kendrick highlights several factors, including changes in U.S. Treasury yields, growing interest in Bitcoin ETFs, and rising odds of Donald Trump securing a second term, as key drivers behind the potential price surge.
Is political shift favorable for Bitcoin?
The upcoming U.S. election could significantly boost Bitcoin’s price action. According to prediction market Polymarket, Donald Trump now holds a 56.3% chance of winning the presidency, while Kamala Harris trails at 41%. If Trump is re-elected, there’s also a 70% likelihood that Republicans will control the Senate and the House of Representatives. This political landscape, Kendrick suggests, could create a more favorable environment for Bitcoin due to potential policy changes under the Trump administration. Bitcoin’s value may benefit from less regulatory pressure and more market-friendly legislation.
Bitcoin ETF inflows and options activity surge
Bitcoin ETFs have also been drawing significant attention recently. According to data from SoSoValue, spot Bitcoin ETFs saw an impressive single-day inflow of $555.8 million earlier this week, marking the most enormous such influx since June. Ten of twelve Bitcoin ETFs recorded net inflows, while none saw any net outflows.
Adding to this momentum, activity around Bitcoin options has surged, particularly around the $80,000 strike price for December 27. Kendrick noted that 1,500 Bitcoin were added to the open interest of these $80,000 call options in the past week, signaling heightened bullish sentiment among traders.
Short-term holders move Into profit
Bitcoin’s recent rally above $67,000 has provided short-term holders a much-needed break, flipping many from losses to profits. As of October 16, data from Into The Cryptoverse revealed that only 8.5% of investors were still holding at a loss when Bitcoin was priced at $66,870. This means that 91.5% of the total supply is profitable, indicating increasingly positive market sentiment. However, such profit-taking levels can often lead to a pullback as traders begin to book their gains.
Bitcoin percentage of supply in profit and loss (Source: Into The Cryptoverse).
Bitcoin is currently facing strong resistance at the $68,000 level, which triggered a 27% decline in late July. Kendrick warns that if Bitcoin bulls fail to overcome this key resistance, the price could correct downward, potentially testing the $61,000 level. Nonetheless, a successful break above $68,000 could signal the start of a sustained rally, pushing Bitcoin toward $74,000 before the U.S. election.
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