This week is set to be one of the most volatile for the crypto market in 2024, with high-stakes events in the U.S., including the presidential election, Federal Reserve meeting, and a slate of economic data releases. Following a Bitcoin-led rally last week, the crypto market saw a weekend pullback, positioning it for further turbulence as these key developments unfold.
1. U.S. Presidential Election: Potential Market-Moving Outcome
On Tuesday, November 5, the U.S. presidential election will bring Donald Trump and Kamala Harris head-to-head. The closely watched race is expected to trigger immediate market fluctuations. Analysts suggest that a Trump win could be favorable for crypto markets due to his perceived pro-crypto stance, while a Harris victory may lead to stricter regulatory perspectives, potentially dampening crypto enthusiasm. Election polling platforms, including Polymarket and Kalshi, show a slight lead for Trump, adding to the uncertainty.
2. Federal Reserve Rate Decision and Key Economic Indicators
In addition to the election, the Federal Reserve’s rate decision on Thursday is highly anticipated. Analysts forecast a likely 0.25 basis point cut, with CME’s Fed Watch tool placing a 98% probability on this outcome. Following the Fed meeting, Jerome Powell’s comments will provide further insights into potential economic stimulus or rate adjustments. Market participants are watching closely, as monetary policy signals from the Fed could influence investor sentiment toward risk assets like Bitcoin.
This week also brings the release of essential economic data:
ISM Services PMI (Tuesday): Offers insights into U.S. economic health in the services sector.
Initial Jobless Claims (Thursday): Serves as a pulse check on the labor market.
Consumer Sentiment and Inflation Expectations (Friday): Provides an outlook on consumer confidence and inflationary trends, which could affect investment behavior.
3. Market Sentiment and Crypto Price Movements
The uncertain environment has already impacted crypto prices. Market capitalization saw a $50 billion drop over the weekend, bringing it to $2.4 trillion on Monday morning. Bitcoin dipped to $67,570 but rebounded to over $69,000, while Ethereum fell to $2,400 before staging a modest recovery. The options market suggests a shift from a bullish stance to a more cautious, hedged approach among crypto traders, reflecting concerns over this week’s potential volatility.
As these events unfold, market participants expect significant movement in crypto, particularly for Bitcoin, as its performance may hinge on the outcomes of the election and Fed decisions. With multiple forces converging, the crypto market could see both heightened volatility and opportunities in the days ahead.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
Source: https://changelly.com/blog/3-factors-shaping-crypto-market-sentiment-amid-u-s-election-week/
