The price of Bitcoin fell suddenly by 3% in several hours along with the US dollar, gold and shares.
The Bitcoin price (BTC) fell suddenly by 3% over several hours on November 4 to $13,566, after rising briefly above $14,000.
Analysts are pointing to the uncertainty surrounding the election as the catalyst for the sharp correction.
Why the markets fell after rising during the vote count
When the major media actively reported on the vote count, the price of Bitcoin and the shares soared. However, after the vote count was over or the day, all risky assets were put in the red, including S&P 500 futures.
Tracy Alloway, a Bloomberg financial journalist and co-host of Odd Lots, said it was probably due to the statement of President Donald Trump. She said:
She said: „S&P 500 futures don’t like Trump’s suggestion to go to the Supreme Court to challenge the election results. He is now in the red.“
Bitcoin’s recent fall is noteworthy since it fell simultaneously with the dollar. Typically, when the dollar falls, Bitcoin and gold tend to rise, as both value shops are traded for the dollar.
As reported by Cointelegraph, BTC recorded a low correlation with other assets, including stocks in recent weeks. The collective correction among most major assets is therefore presented as an unexpected market response.
What will happen to BTC in the short term?
According to CryptoQuant data, the estimated leverage rate of Bitcoin futures at Binance reached an all-time high. This indicates that there are more traders in the Binance BTC derivatives market than ever before.
Ki-Young Ju, the CEO of CryptoQuant, warned traders on 4 November about the increased volatility caused by the cascade settlements. If there is an abnormally large number of contracts in the market, it can cause massive price movements.
In the short term, given the repeated rejection of the $14,000 level, traders are leaning towards a market decline.
There are several key support levels in the immediate future for Bitcoin. First, the $13,300 area has been heavily defended over the past week. If the BTC continues above $13,300, it would indicate buyer resistance.
Second, the $13,000 level has been supported by whale stocks since early November. This means that whales accumulated large amounts of BTC at that level, making it an area of interest for buyers.