Undoubtedly the most important event of the upcoming week are the U.S. Presidential elections. We have seen in the past the high impact that the result has on the financial markets and Bitcoin is no exception, especially in late years where it is more correlated with the stock market than ever before.
So how did Bitcoin trade during the past two U.S. Presidential elections and what hint that gives us for the current one?
** 1D time-frame ** Looking at the three bottom charts, we have (from right to left) the price of BTC during the 2012, 2016 and 2020 (current) elections on the 1D time-frame. As you see on all three occasions the price is trading above the 1D MA200 (orange trend-line), which is a strong indicator of a bullish trend.
What is more interesting than that, is the fact that both on the day of the 2012 and 2016 elections, the price was +17% higher that the 1D MA200. Assuming the same pattern holds this time (2020) too, then Bitcoin should be around 12000 on the election day (November 03, 2020).
** 1W time-frame ** The upper chart is the price of BTC on the 1W time-frame. As you see it has been above the 1W MA50 (blue trend-line) on all three occasions, which indicates strong long-term bullish bias.
As on the 1D chart, what is even more interesting than this, is the fact that both in 2012 and 2016 the time from the day of the elections until the next Cycle Top, was roughly 400 days. Assuming the same pattern is followed, we could have a top in December 2022. Whether that's an interim top or a final Cycle Top, it is unknown but being a final top would go against Bitcoin's theory of lengthening cycles. But it is a good benchmark to follow for long-term investors seeking hints on when/ where to take profits.
Do you think a 12k price on the election day is a bottom? Feel free to share your work and let me know in the comments section!
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When you wrote: "Assuming the same pattern is followed, we could have a top in December 2022." Did you mean December 2021? Your red arrow is closer to that time point.
TradingShot
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@SimK_, That is correct I meant to say 2021. Thanks for the correction.
SimK_
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@TradingShot, Wow; seems like such a short time to experience a bull market. This bull market (if we are saying it started April 2019) has not even felt like a bull. So volatile.
TradingShot
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@SimK_, Indeed and that is why I mention that this is against the lengthening cycles theory. That is why in my opinion it will be an interim high.
ejlouieb
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Trunk good for markets. Strong markets good for Bitcoin.. Nuff said.
A top in december of 2022 would go in line with lengthening theory. The last top came in December 2017 which was the next year. December 2022 will put the cycle longer by one year.