Bitcoin and Ethereum's Short-Term Outlook
Bitcoin (BTC) and Ethereum (ETH) are currently experiencing some challenges in the short term, according to industry analysts. Although both cryptocurrencies have shown impressive recoveries – BTC with a 21% increase and ETH with an 18% uptick from their August 4th lows – significant hurdles remain.
Aurelie Barthere, Principal Research Analyst at Nansen, highlighted that BTC and ETH might not be out of the woods yet. She pointed out that the daily trend remains negative and emphasized the potential formation of a "Death Cross" – a situation where the 50-day moving average falls below the 200-day moving average, often signaling further price declines.
To avert this bearish trend, BTC must maintain a level above $62,000, although breaking through the $70,000 to $71,000 resistance zone poses an additional challenge. Many traders have been psychologically impacted by previous sell-offs in March and July, which could make surpassing these levels difficult.
ETH's performance is closely tied to BTC, particularly during periods of decline. The digital asset has already experienced a Death Cross and needs to stay above $2,700, a critical resistance level tested earlier this year.
Impact of US Elections on Crypto Markets
Another factor weighing on the crypto market is the US election. According to Bitfinex analysts, the recent heavy sell-off in risk assets is partly due to the Bank of Japan's rapid interest rate cuts, affecting the Yen carry trade. This has provided some relief for leveraged traders in the US but has also introduced uncertainty due to the upcoming election.
The electoral race between Democrat nominee Harris and Republican former President Trump is tight, with both having a 49% chance of winning, according to prediction market Polymarket. Analysts suggest that a Trump victory is perceived as a positive outcome for cryptocurrencies, whereas a Harris win could induce hesitancy in the market.
Bitfinex analysts predict that if Trump's odds of securing victory are at their lowest, the crypto market might continue its recovery. This political factor, alongside technical indicators, could influence Bitcoin and Ethereum's price movements in the near future.
