Oct 22 2024: Bitcoin’s price declined on Tuesday, retreating from its recent three-month highs as growing risk aversion—due to uncertainty surrounding the U.S. presidential election—spilled into cryptocurrency markets.
Initially, speculation about a Donald Trump victory had driven crypto prices higher. However, recent polls showing a close race between Trump and Vice President Kamala Harris dampened investor risk appetite. This broader risk-off sentiment impacted cryptocurrencies, dragging prices down.
A strengthening U.S. dollar further pressured crypto prices, while demand for safe-haven assets like gold surged to record highs.
Bitcoin fell 2.4% to $67,412.50 by 00:49 ET (04:49 GMT), after reaching a high of $69,000. Despite the rally, Bitcoin failed to surpass the key $70,000 level, which many viewed as a bullish threshold.
Election Uncertainty Weighs on Bitcoin
Bitcoin’s recent decline can be attributed to rising uncertainty over the upcoming U.S. elections, now just two weeks away.
Trump’s pro-crypto stance had supported Bitcoin’s gains last week, while Vice President Harris’ positive comments on potential crypto regulation had also lifted market sentiment.
However, with the race now too close to call, uncertainty is spreading across risk-driven markets, prompting traders to favor safer assets like gold and the dollar.
Prediction markets still lean toward a Trump win, with Polymarket showing Trump at a 63.7% probability compared to Harris’ 36.4%.
Rate Hike Uncertainty Adds Pressure
Bitcoin and other risk assets also face headwinds from growing expectations that the Federal Reserve may slow down interest rate cuts. This pushed the dollar to near three-month highs and lifted Treasury yields, putting further pressure on speculative assets. Traders are now pricing in a higher terminal rate from the Fed.
Altcoins Follow Bitcoin’s Decline
Broader cryptocurrency markets mirrored Bitcoin’s losses, with Ether falling 3.5% to $2,642.39. Other major altcoins like SOL, ADA, and MATIC dropped between 1.5% and 3%, while XRP shed 0.9%. Meme token DOGE also saw a 1.2% decline.
