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Bitcoin price has dropped into a technical correction after falling by 11.7% from its highest point in October. It was trading at $77,246 as investors reacted to the upcoming US nonfarm payrolls (NFP) data and the US midterm elections.
US Midterm Elections to Have Impact on Bitcoin and Cryptocurrencies
Bitcoin price has dropped in the past few months as the rally experienced in the third quarter started to fade.
The next important driver for the coin is today’s midterm elections in the United States will have major implications for Bitcoin and other altcoins.
On the positive side, if Democrats win the Senate and the House of Representatives, there is a likelihood that they will put the brakes on Trump’s self-dealing that has affected the crypto industry. They will also likely start investigations into the Securities and Exchange Commission (SEC) for its actions.
On the negative side, by winning the two houses, chances are that the Democrats will not vote to advance the CLARITY Act. Indeed, odds of the bill passing and being signed into law by President Trump have dropped sharply this month.
Another negative is that they may try to use their leverage in the two houses to pass stricter crypto rules. They will have the leverage when negotiating with Republicans and the Trump White House.
At the same time, their control will raise the possibility of a prolonged government shutdown. Historically, these shutdowns have had a mixed impact on Bitcoin and other assets.
There are signs that American investors are moving to safety ahead of the elections. One of the top signs is the fact that spot Bitcoin ETFs have shed assets in the past few days. The outflows jumped to $398 million on Monday. They had jumped to $698 million on Friday.
These funds now hold $98 billion in assets, with BlackRock’s IBIT having the biggest market share with over $61 billion in assets. It is followed by funds by companies like Fidelity and Grayscale.
US Nonfarm Payrolls Data
The other important catalyst for Bitcoin will come from the United States, which will release some important jobs numbers. ADP, the biggest payroll company in the world, will release the October private payrolls data on Wednesday. After that, the Bureau of Labor Statistics will release the official NFP report on Friday.
Economists expect the data to show that the economy added over 60,000 jobs last month, a big increase from the 29,000 it added in September. A stronger jobs report will boost the possibility that the Federal Reserve will hike interest rates at its next meeting. Bitcoin tends to underperform the market whenever the Fed is hiking interest rates.
Bitcoin Price Forecast: Technical Analysis
The daily chart shows that the BTC price has come under pressure in the past few days. It has slumped from a high of $87,365 to the current $77,177.
The coin has slumped below the 50-day Exponential Moving Average (EMA). It has also dropped below the 23.6% Fibonacci Retracement level and the Supertrend indicator.
Bitcoin has also formed a series of lower lows and lower highs. It is also hovering near the Major S/R pivot point of the Murrey Math Lines tool.
Therefore, the path of the least resistance for the coin is bearish, with the next key target being at $72,565, which coincides with the 50% Fibonacci Retracement level. A drop below that level will point to more downside towards the psychological level of 70,000. On the flip side, a move above the resistance at $80,000 will point to more downside.
