The critical moment in the US comes when the coronavirus triggers more blockades and money printing plans in Europe.
Get ready for the US elections: 5 things to observe in relation to Bitcoin this week
Bitcoin (BTC) starts a new week and month a few dollars from its biggest monthly closing in history – what’s next?
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The Cointelegraph analyzes five factors that can influence the price of BTC/USD as the US goes to the polls and the coronavirus triggers new blockages throughout Europe.
Election day approaches for Trump vs. Biden
On Monday, the U.S. dollar currency index (DXY), an indicator with which BTC/USD has shown inverse correlation, continued a week-long climb to rise above 94.
This week has a geopolitical event that traditionally causes damage in the markets: the US presidential election.
Arriving at a time when the coronavirus irritates and restricts the daily lives of many U.S. citizens, the markets will be on the lookout for clues as to the policy of the future incumbent president.
The implications are not only social. The first economic advances have accompanied the virus, with consequences, including companies dispensing the money that is rapidly inflating in exchange for Bitcoin.
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As reported by Cointelegraph, analysts believe that no matter who wins, the result will be a blessing for safe havens like gold. Bitcoin, despite becoming less tied to macro markets in general, can still react to movements in the strength of the US dollar.
„Asia’s stocks rose driven by China’s optimistic industrial activity in the volatile beginning of the crucial week that spans the U.S. elections and the Fed meeting, events that could set the tone for the markets for the rest of 2020,“ analyst Holger Zschaepitz summarized on Twitter Monday.
Zschaepitz had noticed over the weekend that Bitcoin was rising along with negative income debt volumes around the world. Global bonds with negative yields – where the creditor literally pays the debtor – fell from a record $17 trillion to $12 trillion at the end of 2019, only to rise again this year.
„Negative returns are good for Bitcoin, which does not yield interest by itself,“ he explained.
Europe has new money impression
Besides the USA, the situation for the markets in Europe seemed bleak thanks to the blockages of the coronavirus returning throughout the continent.
Amid new warnings of contractions in economic activity due to the measures, the markets began to ignore even the signs of upsurge in favor of reducing the potential impact of the elections.
Zschaepitz noted that German stocks alone lost $4.1 trillion in value last week, the highest value since the March crash.
For Bitcoin supporters, the time was ripe for more buying than ever, as the European Central Bank (ECB) confirmed more stimulus and more money printing.
About the new blockade in Germany, the popular trader MMCrypto urged his Twitter followers to reduce exposure to fiduciary currency.
„The crazy news is that the businesses that have to close will receive up to 75% of their revenue in newly printed money“, highlighted the trader.
Mini gaps of „optimistic“ futures open and close
Focusing on Bitcoin’s specific price triggers, the weekend activity allowed another so-called „gap“ to open in the futures markets.
Gaps are formed when the end of a week’s trading is at a different price point from the beginning of the next. Historically, the BTC/USD moves to revisit the levels left out over the weekend, whether they are higher or lower than the Monday spot price.
As noted by market analyst Zack Voell, four small gaps have appeared in CME’s Bitcoin futures market – every weekend for the past four weeks has produced one.
„CME Bitcoin futures opening with a bullish gap for the fourth week in a row. This is very optimistic,“ Voell commented. A subsequent move down during Monday’s trading closed a gap in the $13,700 range.
As the Cointelegraph reported, only a small gap at $16,000 remains high on the historic Bitcoin price chart, while further down, a gap at $9,600 was not filled the last time Bitcoin briefly dropped below $10,000.