Bitcoin Shows Strong Fundamentals, Follows Patterns Seen in Previous Elections: CryptoQuant

Bitcoin is demonstrating robust fundamentals and is following bullish patterns observed during previous U.S. presidential elections, according to analysts at CryptoQuant. Although many crypto investors are currently cautious following the recent elections, the outlook for Bitcoin remains positive.

Strong Valuation and Historical Performance

A recent weekly report indicates that Bitcoin (BTC) is fairly valued, which suggests that any positive developments from the elections could lead to a significant price rally. Historically, Bitcoin has performed well following the last three presidential elections: it surged by 22% in 2012, 37% in 2016, and an impressive 98% in 2020. In 2024, Bitcoin has already exceeded its previous all-time high (ATH) of $73,750, reaching a new peak of $76,450. As of now, BTC is trading above $74,500, according to CoinMarketCap.

Prior to the election results, Bitcoin was valued at around $67,000, just above its realized price, indicating a fair valuation similar to the scenarios observed in 2016 and 2020.

Growing Demand and Market Observations

Bitcoin's demand is reportedly increasing at a rate not seen since the last election. In 2016, demand dipped until late November, while in 2020, it surged consistently until year-end. Currently, demand has been positive since late September, with an increase of 248,000 BTC per month, marking the fastest growth since April 21. Such trends often precede substantial price rallies.

CryptoQuant also noted that the recent decline in Bitcoin's price was not due to short-selling but rather profit-taking after a 20% rise in October, which led to approximately $4 billion being cleared from the Bitcoin futures market.

As the market anticipates a catalyst to drive significant movement, Bitcoin traders are showing reduced selling pressure, evidenced by fewer assets being transferred to centralized exchanges. During the last presidential election, daily BTC inflows to exchanges were around 73,000 BTC. Currently, inflows have dropped to about 45,000 BTC, indicating that investors are cautiously observing the market, which is further supported by the Coinbase premium being in negative territory.