While many crypto traders are trying to speculate the market’s direction based on the outcome of the upcoming United States election, one analyst warns that a close showdown between the presidential candidates could also trigger some unexpected volatility.
“Additional volatility, however, could emerge if results are too close to call and it takes too much time to reach an outcome,” FalconX head of research David Lawant opined in a Nov. 1 market report.
Market participants relieved to be done with ‘directionless trading’
Lawant noted that after the crypto market has been “directionless” since April, traders will be relieved once the US election is over, as it will clear the way for the markets.
“After six months of directionless trading, markets appear eager to move past election uncertainty toward firmer ground,” he explained.
Since April, Bitcoin (BTC) has traded within a range of $53,991 and $73,149.
Lawant emphasized that although investors are hopeful for "positive outcomes" no matter which party wins the US election on Nov. 5, some believe a Donald Trump victory may lead to “stronger gains” due to clearer pro-industry commitments.
Similarly, Swyftx lead analyst Pav Hundal recently told Cointelegraph that “a Trump victory would likely provide a dopamine hit.”
Meanwhile, options traders appear bullish on Bitcoin breaking its all-time high just weeks after the election, regardless of the outcome.
Recent data from crypto exchange Deribit shows that Bitcoin Open Interest (OI) — the value or number of outstanding futures contracts that have yet to expire — for call contracts expiring at the end of November is “concentrated around $80,000.”
Bitcoin and Solana are the stand outs, says Lawant
Lawant explained that along with Bitcoin, Solana (SOL) also stands out “in conversations as potential outperformers.”
“BTC, serving as crypto's proxy, could further benefit from ETF flows—2024's primary source of new capital. SOL's strong narrative positions it as a likely destination for profit diversification.”
Meanwhile, Lawant claimed that Ether (ETH) remains “notably absent from most discussions.”
Related: 5% of US voters identify as single-issue crypto voters — Paradigm poll
The commentary comes only weeks after Dan Tapiero, founder of 10T Holdings, said that the US election outcome won’t change the bullish trajectory of cryptocurrencies such as Bitcoin, which will likely tap $100,000 per coin regardless of which presidential candidate wins.
“I don’t think it really matters. Everything is going up now. The election will pass,” Tapiero said of Bitcoin during a panel discussion at the Permissionless conference in Salt Lake City, Utah.