3 Reasons Bitcoin Price Could Be Down to $67.3K

Bitcoin (BTC) fell 6.7% between October 31 and November 4, breaking below the $67,500 mark for the first time in eight days. The decline resulted in the loss of more than $190 million in leveraged long positions and coincided with uncertainty surrounding the Nov. 5 U.S. presidential election.

Although this is a short-term depression rate, three indicators of Bitcoin derivatives show that the market is not panicked. These positive indicators include high traders' long-to-short ratios in China, overall BTC futures open interest, and stable demand for the coin in China.

Wells and market makers on Binance and OKX show relative confidence in Bitcoin's price recovery based on their total positions and futures positions. Although it recently fell below $67,500 on November 4, this indicator has not shown any weakness.

Traders are optimistic about Bitcoin's price, but are reluctant to pay above $70,000, as some analysts argue that a victory by Kamala Harris and the Democratic Party could bring more regulatory oversight and limit the cryptocurrency's integration with traditional finance.

US elections introduce uncertainty and limit short-term progress

Anonymous crypto trader CryptoRand suggests that Kamala Harris's vague stance on cryptocurrencies “plants the seeds for doubt” and that “uncertainty can be worse than adversaries.” While Harris' policies will ultimately benefit the industry, they may not match the promises of Republican nominee and former President Donald Trump.

Trump has hinted at firing SEC Chairman Gary Gensler “on day one,” although his specific plans to encourage Bitcoin adoption remain unclear. There is debate over the pace at which significant changes can occur within government agencies and the US Treasury. Investors therefore see limited motivation to push Bitcoin's price to new all-time highs regardless of the outcome of the US election.

A major factor in the expected divergence around the US presidential election is the central bank's focus on “digital assets,” including digital currencies (CBCCs) and tokenized assets, which are separate and largely unrelated to Bitcoin. Using blockchain technology for the digital representation of real-world assets has minimal impact on the overall demand for Bitcoin.

To determine whether professional traders are minimizing exposure, it is important to analyze the total open interest of Bitcoin futures. A sharp decline in this measure indicates discomfort with the sector's exposure, even if the sentiment is gloomy or subdued.

Current BTC open interest stands at 582,000 compared to last week and 10% above the October 4 level. Combined with long-to-short data from top traders, this suggests a modest bullishness even after Bitcoin rose above $73,500 on October 29.

In China, traders showed resilience, with USD Tether (USDT) stable coin trading against the official USD/CNY rate. During periods of high demand for cryptocurrency withdrawals, USDT often trades at a premium of 2% or more. Overall, derivatives benchmarks show no signs of distress, and traders appear confident that the bull market will continue following the US presidential election.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.