Significant political and macroeconomic developments are expected this week due to the U.S. election results and Federal Reserve’s anticipated interest rate cuts. The race between Donald Trump and Kamala Harris is tightening, leading crypto market participants to adopt a cautious stance ahead of the final results. Bitcoin (BTC) 
$98,637 continues to trade below the $70,000 mark, while altcoins faced increased selling pressure over the past weekend. Consequently, the overall crypto market is bracing for volatility and liquidity challenges this week.
How FOMC and U.S. Elections Will Impact the Crypto Market?
Bitcoin closed below the $70,000 resistance without reaching a new all-time high last week. Under significant selling pressure, altcoins are experiencing a similar cautious approach from crypto market participants ahead of the upcoming FOMC meeting and U.S. election results.
Fed’s Interest Rate Decision and Election Outcomes
On November 7, Thursday, the Federal Reserve will announce its latest interest rate decision. According to CME data, there is a 99.7% probability of a 25 basis point cut. Meanwhile, voting for the U.S. elections begins on November 5, with results expected around November 6. These developments are likely to have a substantial impact on both the broader financial markets and the crypto sector.
Expected Volatility in Bitcoin and Altcoins
In recent weeks, the crypto market has reacted to political developments and macroeconomic factors in the U.S. The crypto market is likely to follow the movement trend of the S&P 500 index and is prepared for increased volatility this week.
According to The Kobeissi Letter, the S&P 500 index typically records lower returns in the run-up to elections when the ruling party faces a high chance of losing. However, historical data shows that, on average, the S&P 500 index yields a positive return of 11.3% during election years.
Crypto market participants may encounter similar volatility surrounding the U.S. elections. Historically, significant bull markets have started after election periods, and it is anticipated that Bitcoin’s price could reach $100,000 by year-end.
Preparing for a Parabolic Rally in Bitcoin
Analysts suggest this rally that may begin after the election period is likely to be sustainable. Bitcoin’s upward trend could continue, potentially driving its price to the $100,000 level. If it replicates similar performance cycles, a parabolic rise above $200,000 could be observed for Bitcoin.
While potential volatility and liquidity pressures in the crypto market may pose risks for participants, managing market fluctuations effectively could also present opportunities. It will be crucial for market participants to closely monitor macroeconomic and political developments to make informed decisions.
