Analyst: Bitcoin has shown significant pullbacks in every U.S. midterm election cycle; attention should be paid to the key support level of $73,000.
Tapbit news, October 24 — Crypto analyst Ali Charts posted that as the U.S. midterm elections on November 3 approach, investors may be overlooking the Bitcoin drawdowns that have repeatedly occurred in previous election cycles. He believes this election could again be accompanied by significant volatility, with downside risk warranting attention, and his key downside level to watch is $73,000.According to his statistics, in the U.S. midterm election cycles of 2010, 2014, 2018, and 2022, Bitcoin saw drawdowns of 72%, 65%, 52%, and 27%, respectively. However, he emphasized that correlation does not equal causation, and the elections themselves are not necessarily the cause of the declines; these drawdowns were also influenced by Bitcoin's broader market cycle, liquidity conditions, and investor sentiment.Fourth-quarter returns show a similar pattern: in 2014, 2018, and 2022, Bitcoin fell 16.70%, 42.16%, and 14.75% in Q4, respectively. The only exception was 2010, when it rose 391% in the quarter, but Bitcoin was still in its early development stage at that time. Therefore, in three of the past four midterm election years, Q4 recorded negative returns.Regarding the subsequent trend, Ali Charts said the $73,000 level is close to the average purchase cost of current short-term Bitcoin holders and can be used to observe the positioning of recently entered investors. He noted that in an already established bull market, Bitcoin often finds support near the short-term holder cost basis after a significant correction.He believes that if selling pressure accelerates after the November 3 election and pushes Bitcoin back to around $73,000, that area will become an important level for testing whether buyers are still willing to defend the overall bullish trend. If the price continues to recover from that area, it would reinforce the bullish view; operationally, he will wait for signs of selling pressure exhaustion and renewed demand before considering establishing long positions.[Source]
