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With the U.S. election just around the corner, Bitcoin volatility has taken an unexpected dip. Bitfinex analysts, in their November 5 market report titled âCalm Before the Storm?â, have noted that Bitcoinâs implied volatility has dropped to the low 40s. This dip suggests that traders are reluctant to place high-stakes bets on the cryptocurrencyâs movement until the electionâs outcome is clearer.
Notably, Bitcoinâs forward-looking volatility index, provided by Deribit, reached a three-month high of 65.7 on November 3, only to fall back to 63.2 shortly thereafter. This softening has coincided with a drop in Bitcoin open interest on CoinGlass, with traders rapidly closing both short and long positions.
Bitfinex analysts have suggested that despite the general anticipation for elevated volatility around election time, many market participants are exercising caution, adopting a âwait-and-seeâ approach.
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Big Post-Election Moves Anticipated
Despite this current lull, analysts at Bitfinex still anticipate a substantial post-election shift in Bitcoinâs volatility. A sudden volatility spike could trigger major price moves, but thereâs also the possibility that a lack of significant movement might signal an impending correction for Bitcoin on shorter timeframes. Some traders have already voiced their expectation for Bitcoin to swing by âat leastâ 10% in either direction depending on the election outcome.
This wait-and-see sentiment isnât unique to Bitcoin. The report also highlights that with Bitcoin dominance reaching a high of over 60%, interest in altcoins has noticeably waned. Altcoins, including Ethereum and Solana, have seen considerable price drops, and sentiment around these assets has dulled as Bitcoin continues to pull in most of the crypto marketâs capital.
Altcoin Market Lacks Momentum as Bitcoin Dominates
As Bitcoin absorbs the bulk of market interest, Bitfinex analysts observe a notable âapathyâ in altcoin markets. Both Ether and Solana are experiencing drawdowns of around 12% from recent highs. According to Bitfinex, without a fresh catalyst, altcoins may struggle to rebound in the near term.
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In essence, the crypto market is poised for a decisive week as the election unfolds. Whether Bitcoinâs current resilience will hold or lead to major shifts remains to be seen, but a burst of volatility seems all but inevitable.
