The price of Bitcoin (BTC) crashed immediately after the 2014 and 2018 US midterm elections. However, while the price action is similar, indicator readings suggest that won’t happen this time either.
The 2014 and 2018 US midterm elections were held on November 4 and 6, respectively (black vertical lines). It is interesting to note that the crypto market fell sharply immediately after the end of this election.
For 2022, the midterm elections will take place this November 8 (white line), under the presidency of Joe Biden.
Here we will look at the similarities as well as the differences between the evolution of the Bitcoin (BTC) price and the total crypto market capitalization (TOTALCAP) in the previous and current elections.
BTC Price Similarities
The main obvious similarity when looking at Bitcoin’s price action is the timing between the asset’s all-time high and the election. Indeed, 350 days until the summit after the 2014 election and 336 days after the 2018 election.
In 2014 as in 2018, the price of Bitcoin fell a week after the election. Its decline continued for about a month and showed a magnitude of 58% and 51% respectively. Within the current move, a 50% drop would take BTC back to $10,400.
A completely different ROI
While the price action between these periods turns out to be similar, the RSI movement is not. In 2014 and 2018, the indicator only fell below 40 after the elections. Then his respective finish was 35 and 37.
Within the current cycle, the RSI has moved well below 40. Its June 2022 low of 34 (red arrow) is the lowest on record.
Furthermore, the RSI has already started to generate a bullish divergence (green line). This is a sign associated with changing upward trends.
So, unlike the price action, the data from the technical indicators shows that the movement of Bitcoin after the midterm elections will be different from that of 2014 and 2018.
The crypto market cap makes for good reading on the picks
The total market capitalization of kyptos presents a relatively good outlook.
First, its price is showing a double dipping pattern, which is considered a bullish pattern. Both of these cavities have long lower filaments (green arrows).
The weekly RSI then generated a bullish divergence (green line).
Finally, the same weekly RSI is on track to break above the bearish divergence trendline (black line).
Although it has not yet broken the latter, it is important to note that the price of the market cap is still far from its resistance line. Thus, an increase in this would equate to an upward movement of nearly 24%.
Therefore, it seems more likely that after the mid-term elections, an increase in prices will occur than a decrease.
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