‘Trump trade’ and derivatives market optimism help bitcoin gain ground ahead of US election: analysts
2024-10-29

In early trading on Tuesday, bitcoin’s price rose from $69,000 to now trade firmly above the $71,000 mark, signaling growing optimism among traders ahead of the U.S. elections in one week’s time.
Analysts noted that robust technical indicators, renewed inflows into spot bitcoin ETFs, and broader macro factors — including speculation of a Trump election victory and seasonal Q4 market strength — support bitcoin's upward trajectory. "The ‘Trump trade’ narrative and favorable Q4 seasonality create a perfect storm for bitcoin, promising an exciting period ahead despite potential price volatility leading into the election," Bitfinex analysts told The Block.
Bullish options and election-related volatility
The options market reflects a positive outlook for bitcoin, with call options positioning for the price of the largest digital asset by market capitalization to rise above $80,000 by year-end potentially. “December 27 call options at $80,000 are gaining popularity, showing confidence in a post-election rally,” Bitfinex analysts said. However, they noted that implied volatility, currently elevated, suggests possible price fluctuations around the election date. The Bitfinex analysts added that premiums on options expiring during the week of the U.S. election day have increased, with implied volatility peaking in the days shortly after November 5, signaling potential short-term turbulence.
QCP Capital also observed increased volatility tied to election week-related options, noting that implied volatility for these expiries has reached 64% and could rise further. "While call demand has softened as bitcoin stabilizes above $70,000, high open interest on perpetual contracts indicates a strong bullish positioning for further upside," QCP analysts said.
In the futures market, strong open interest in perpetual contracts — currently at annual highs — signals robust market positioning for potential further gains. The recent price spike triggered short liquidations worth over $179 million in the cryptocurrency market over the past 24 hours, with bitcoin shorts accounting for $80 million of the total, CoinGlass data shows. 
U.S. spot bitcoin ETFs saw $479 million in net inflows on Monday
Spot bitcoin ETFs saw inflows of $479.35 million on Monday, marking their highest daily inflows in two weeks. BlackRock’s IBIT, the largest spot bitcoin ETF by net assets, led with $315.19 million, extending its positive flow streak to 11 days. Other notable inflows included Ark and 21Shares’ ARKB at $59.78 million and Fidelity’s FBTC at $44.12 million, while Bitwise and Grayscale also reported steady inflows. The total daily trading volume for these 12 ETFs rose to $3 billion, up from $2.9 billion last Friday.
Reflecting network strength, bitcoin’s mining difficulty recently rose by 4% and is expected to increase by another 6%, marking three consecutive positive adjustments, according to Blockware Intelligence. “While rising difficulty increases competition and could squeeze miner profitability, it underscores the security of the network and is a positive sign for Bitcoin’s broader market health," Blockware Intelligence said in an email sent to The Block.
Bitcoin rose by about 4% in the past 24 hours, changing hands for around $71,400 at the time of writing, according to The Block's price page. 
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